What is to say that next time the gamble gets to -25%, and you are feeling lucky and you let it ride. Man, i don't know... RISK must be controlled, kept in check and must never let it creep through it in anyway, shape or form. That's all I know.
oh.. yeah, you were using my short for.. T and an S, for TheSorcerer.. damn, am I already famous like BnB, etc ????
All I can tell you is that there are a lot of common inefficiencies in the price action of many stocks. Same tricks being played over and over. I just take advantage of these tricks and piggyback my money on top of big boys/crooks in the Wall Street for a short ride.
My primary risk control is that I WITHDRAW my earnings EVERY SINGLE WEEK. I keep my account size small. I don't play with several hundred thousand dollars in my account. I am well over 600% up for the year based on my original 25k that I started out with. 10% is not too bad when I make 10% of my account every week and withdraw that money every week. Also, this morning's blowup was limited. What I mean is that I was willing to tolerate losing up to that amount (6k) in order to go for the big one, and I knew how risky the trade will be. When the loss hit 6k based on my signals, I took the loss with no second thoughts. It sucked. It wasn't what I normally do. But I was willing to take a shot this time. I'm no longer very emotional and keep averaging down or do stupid crap like that to turn 6k loss into 20k loss. Hope this helps.