With respect to investing it means "Stop losing money." One big mistake is to risk too much of your capital on any one position. To avoid that, you might chec

With respect to investing it means "Stop losing money." One big mistake is to risk too much of your capital on any one position. To avoid that, you might check out the Kelley criterion for optimal bet sizing: https://secure.wikimedia.org/wikipedia/en/wiki/Kelly_criterion https://secure.wikimedia.org/wikipedia/en/wiki/Kelly_criteri... . Another mistake is to put on a position and then watch it drop without limit, insisting that you're "right" all along and the market just hasn't seen it yet. Better to have a stop-loss and bug out of the position the minute the market judges you wrong. You can always put on the trade again later. I really didn't even have to mention that second point, since it's already implied by the Kelley criterion. If you're trading without a stop loss, then quite simply you're risking the entire amount of that position and you can calculate Kelley accordingly. "Stop losing money" is rule number one. Remember, if you lose 50% of your capital, you have to double your money just to break even again. Better to lose only a percent here and a percent there, and occasionally hit a 10% gain. You can also consider trailing stop losses, which also fit under the Kelly criterion if you count unrealized gains as part of your overall capital.