Too many traders cut winners and let losses run. A successful trading strategy needs to see this reversed – cut the losers early and let the winners run and run. This, of course, is harder in practice than in theory.
The most important tool in managing risk is the simple stop-loss. Stops mean you can set the maximum level of loss you are prepared to sustain for the trade. Stops can act against the trader – if you set it too close to the entry point you may get stopped out before your spread bet has a chance to make a profit. But triggering a well-placed stop is better than losing more than you have in your account.