Mark Minervini is a familiar name in our trading world. He is dubbed the witch of the market. He was interviewed by Mr. Jack Schwager in the hugely popular trading series called Market Wizards. In addition, Mark Minervini is also famous for achieving an indefinite title in the 1997 US Investing Champion competition with a return rate of 155%.

In addition to sharing knowledge and writing books, Mark Minervini also shares many valuable trading experiences and lessons with our community of traders. In his recent twitter post, he shared his top 3 trading principles in capital management to have permission to be translated for you guys to refer to;

1. Keep all your losses as small as possible

This is his first principle in capital management. Always keep every trade with the smallest possible loss. Most successful traders also adhere to this principle.


Keeping all losses small can help traders stabilize their psychology, trade more focused, and, importantly, still have the capital to prepare for the next opportunities.

Moreover, keeping small losses for a long time also brings great benefits. That the trader gradually gets used to the small risk, also makes the psychology to be maintained over a long period of time, it becomes the trading style of the trader and they will rarely break this principle. Thus, in the long term, in the trading process, it will rarely appear unexpected losses that make them unbearable.

2. Avoid deals with large losses

This is the second most important principle. Smart traders always know how to choose transactions with moderate losses, in accordance with their own risk appetite. As for the amateur traders, they have almost no signal filtering. That is also the reason why many traders often encounter large losses while still trading according to the principles of the method.


3. Never take too great a risk for every strategy you implement

It is very easy for many traders to take a large amount of risk on a trading strategy. This decision can bring great profits but if trading in the long term, using large volumes will become a big problem for traders.

When accepting big risks, it is unlikely that the trader will make a great profit, but with a big loss, the possibility is very high. So don't trade off losses like that. Instead, look for opportunities with low risk, but the possibility of high returns is better.