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Call it nerve, courage, bravado, or heart; I call it guts, and this one quality is as essential as patience and knowledge. Some people have too much guts, and this isn’t good because they’re too hopeful and tend to overtrade. Some lack the guts to act (either to enter a position when the time is right or to cut a loss when it isn’t). This is a catastrophic fault and must be overcome. You need guts to pyramid positions, which is not easy, but it’s where the big money is made. In this book, I am going to teach you to trade without hope, without fear, and with the right amount of guts. I will instruct you to enter positions on the proper basis and then urge you to remember at all times that you could be wrong. You will need a defensive plan to cut your losses when you are wrong. I’ve been a student in the school of hard knocks many times, but I’ve never lost my guts. At times, I know I’ve had too much and have overtraded, but then there are some people I know who have an inability to pull the trigger, and that is just as deadly. Looking back only brings regrets, so you need to face the future with optimism, knowledge, patience, and guts.

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