A primer on knowing when to do what

What are you waiting for?

As a young trader, I often swung for the fences, creating big win/big loss scenarios. The stress was killing me, but I thought that's what I needed to do. Funny thing, though, I then started trading smaller and began sleeping better. Funny thing: my returns improved. Lesson: Stress distorts judgment. Size determines stress. Eventually, I began trading bigger than ever, but it was a smaller percentage of my net worth, as I diversified and learned all about keeping risk in check.

The first rule I wrote down saved me more money than any trade. Not because it was smart —because I followed it. Do not trade on fear, make rational decisions! Lesson: Whether it's stocks or poker, or any major life decision. Do your research. Develop an educated opinion. Prepare to be flexible as facts change on the ground. Make decisions based on available information, not fear!

I once wrote an apology letter to myself after a blown account. Not dramatic. Just factual. A simple apology from current Ross to future Ross. I never made the same mistake again. Lesson: If you won’t personally hold yourself accountable, the market will — publicly.