Jim Paul's "What I learned losing a million Dollars" which is one of the very famous books in our trading world. The book shows us the author's perspective when he lost money and dissects the reasons and ways in which he dealt with losses. The book leaves many lessons about capital management for us traders.

Here are 10 lessons drawn from quotes in What I learned losing a million Dollars, Jim Paul and Brendan Moynihan give great examples of how easy trading is if you can lose money. is an inexperienced trader


1. But the initial success, the profits that traders make right from the beginning of trading are only temporary, even if it will cause the trader to have bad results later if traders see trading really easy make money like that.

2. There are many ways to make money in the market when there are participants. But there are only very few ways to lose.

3. A bulb manufacturer understands that 2 out of 10 bulbs will not work. A fruit vendor knew that some apples would spoil. Those are losses within acceptable levels. In trading, no one wants to lose, but it is difficult for a trader to cope with unexpected losses. So accepting losses as part of trading is essential. The trader's job is how to minimize the smallest loss possible.


4. If you know exactly how much you will win, but do not know how much you can lose, you are refusing to lose.

5. If you enter into a trade that does not see an end, these transactions could cost you until your account explodes. So, before entering the trade, you already have a starting point (entry point), you must have an endpoint (exit point) for your trading strategy.

6. Keeping principles and discipline is a difficult part of trading, but in fact, most traders lose money with no rules or discipline.


7. You cannot calculate the probability of winning for a trading strategy. You can only calculate how much you will lose. All you can do is manage your losses and not predict the profitability of the strategy you execute.

8. The risk-to-return ratio (RR ratio) does not provide us with the likelihood of winning a trade. Don't justify a winning strategy based on this ratio.

9. Never justify loss strategies. Instead, find out the real cause of the strategy's losses and fix it.


10. The last objective moment of a trader is before placing a trade order. As soon as the order is pushed into the market, the trader cannot do anything anymore. But if the trader still stubbornly wants to act unwise, the action is not part of the plan such as removing a stop loss, adding a trade order, closing a loss, or moving the stop loss, ... then these actions can cause the trader. lose more money. That is why all of your decisions and plans must be made before trading.