Take More Risk When You Are Up -- Less Risk When You Are Down

The practice of sizing your risk on the basis of recent P/L performance is the most important rule.

but is is hard to follow particularly when you are losing money, as there is a natural urge to increase exposures to minimize the underperformance quickly.

Your instincts tell you to load up and make it all back as quickly as possible

you may see this strategy pay off once , twice or several times, but ultimately, it is a ticket to disaster -- you will blow out in spectacular fashin -- at a huge loss.

YOU should cut losses during periods of performance difficulty