protective stops are absolutely critical to set when entering a position. I believe that RISK is the most important thing to monitor on a daily basis based on the previous day's close. And to look at risk with a thousand different eyes. Certainly never risk more than 5 percent per trade. I learned to always cut your losses. Famed trader Ed Seykota says much the same: cut losses, ride winners, keep bets small, follow the rules without question and know when to break the rules. Ed and I also believe all great traders are seekers of truth.