Key Points

• Defining risks in terms of number is crucial. If you can’t think in terms of numbers, don’t play the game.

• To be successful as a trader; and to be successful in life, you need to develop the ability to ask the right questions.

• Trend Following strategies make their money on the edges of the bell curve.

• Act as a devil’s advocate. Question assumptions. Check your inferences. Consider the improbable or the unpopular.

• People mistakenly see a “regular” event and think it “rare.” They think chance will “correct” a series of “rare” events. They see a “rare” event and think it “regular.”

• People tend to regard extremely probable events as certain and extremely improbable events as impossible.