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I remember being thrilled as a very little boy when "The Greatest Show on Earth" came to town. The Ringling Bros. and Barnum & Bailey Circus would make its way to our area every few years.
They would have a parade through town with the animals, clowns, and performers bringing a carnival atmosphere to the region.
When the circus started that night, I loved the animal acts. The clowns I could take or leave. But what really mesmerized me were the acrobats who did daring feats high in the air. Trapeze acts, where timing, agility, and strength combine to provide thrilling shows way up high, fascinated me.
As I think back, there was a good reason that a little boy like me could enjoy the thrill of those seemingly death-defying high-wire and high-flying acts without being terrified.
The performers had a safety net.
A huge and very elastic net under the acrobats allowed them to attempt amazing feats high above knowing that a mistake would not do irreparable harm.
In The 10-Minute Millionaire system, we too benefit from several types of safety nets.
Let's look at why we can sleep soundly at night, knowing that our high-flying trades have the proper "safety net" under them…
Our Big Safety Net, Plus a Great Trade Management Shortcut
The 10-Minute Millionaire system has a two-pronged money management strategy:
- We use stop losses (also called contingency exits) on each trade so we know when to exit a trade if it doesn't go as planned.
- We use proper position sizing so we don't risk too much capital on any one idea.
These are the big components of our system that form a safety net under our entire strategy. We'll dig more deeply into these key parts of the system in future articles.
But today I want to highlight another tool that allows us to evaluate individual trades in a subjective, unemotional way.
The secrets in this book helped one Money Morning reader make a $185,253 profit in just eight days. Learn how to claim your copy here…
When a trade is ambling along without much movement in our intended direction, it's natural (even healthy) to wonder if the trade is still working.
Acrobats are acutely aware of the location of their bodies in space, and they can tell right away if their timing is off and if they're likely to take a tumble to the big net below.
It's a little difficult to develop the same physical "sixth sense" for trading, but fortunately you don't need to…
I use many tools to help answer the important ongoing question of whether we should still be in a trade. Here are a few:
About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.