Some Advice From An Old Trader

I stumbled across some of the writings of legendary trader W. D. Gann. Gann (1878-1955) and thought I'd share some of his advice:

"Avoid increasing your trading after a long period of success or a period of profitable trades.
Be aware that you too have bad cycles. Just like the markets, you will have bullish and bearish times in your life. If you have 3 losses in a row stop trading, your cycle has changed."

This one reminded me of some advice in the book, "Fooled by Randomness", regarding how a run of good luck invariably is followed by a bad unexpected incident.

"Reduce trading after first loss; never increase."

I've done this several times. Taken a loss and then upped my stakes in the next race, to try and win it back. Mostly ended up with me down even more. I guess the idea is that when you are losing, your mental state is different to when you are winning. When you are losing, your brain is in losing mode. When in losing mode you really want to lower your stakes to avoid losing even bigger. When you are back in winning mode, then the stakes can go up.