Trading is not investing, which this guy completely does not understand. He says that he still doesn't believe in diversification and that it's not the answer.

Trading is not investing, which this guy completely does not understand. He says that he still doesn't believe in diversification and that it's not the answer. The answer to what? If we're talking about building a long-term portfolio, it's the best answer we've come up with to-date. On the other hand, almost by definition, you don't diversify in trading. Yes, you can have a variety of open positions but each one is an individual bet and must be viewed as such. Selling off a diversified portfolio is not recommended in a market downturn but sticking to a bad trade is a recipe for disaster. The crucial lesson here is setting a stop-loss for every trade and abiding by it no matter what. Market Wizards: Interviews with Top Traders by Jack Schwager, considered a classic, focuses on the psychology of trading. At the end of the book, the author reflects on the one thing that all of his subjects had in common. Every one of them experienced a massive loss, sometimes several, early in their careers. And every one of them came back with the discipline to cut future losses at predetermined thresholds. From personal experience, it's also crucial to lock in profits. You need to set a reasonable sell-down schedule that won't leave you with the urge to claw your face apart if you miss the chance to sell. I recall reading that missed opportunities tend to haunt traders much more than losses. This was certainly true for me and part of the reason why I decided to get out of trading altogether. I ended up with a tidy profit but it still hurts to think about the life-changing amount that I missed out on. If I had followed a system and banked half or two thirds of the life-changing amount, I am pretty sure I would have had no regrets. That's because I never got hung up on taking an acceptable loss on a position that would have eventually turned a profit. Just like in poker, it's easy to absolve yourself of blame, when you are following a good strategy. But at the end of the day, one has to understand that trading is gambling. And you don't gamble with more than you can stand to lose. I've learned that gambling is not for me and so I no longer trade.