It isn’t the charts that give me my edge; it’s risk management. I get an edge from discipline,…

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about making money, and when you look at investment literature, buy-and-hold investing wins over the long term, every time.

The essence of Brandt’s strategy is to risk very little on any given trade and to restrict trades to those he believes offer a reasonable potential for an objective that is three to four times the magnitude of his risk.

Another common error in the psychology literature concerns what is called “mental accounting.” The Thorp, Kelly, and Shannon school of information theory requires that, for an investment strategy to be ergodic and eventually capture the return of the market, agents increase their risks as they are winning, but contract after losses, a technique cal