Some good advice

Brett Steenbarger has some good advice on TraderFeed for guys like me when it comes to managing risk throughout the day. Today I lost more than I should have because I didn't follow my rules. Here's what Brett has to say:

"Every intraday trader needs to have--and enforce--a "drop dead" level for the day. That reflects the maximum loss you're willing to incur in a single day's trading. If you hit that level in a day, it tells you you're not seeing the market well and, like a pitcher on a bad outing, you need to get off the mound and call it a night.

In my own trading, I have--in addition to the drop dead level--a warning level that is roughly half of the maximum loss I'm willing to incur. If I hit that warning level, I drop my size (risk) and don't return to normal-size trading until I've worked my way out of the red for the day. By heeding the warning level and dropping my size, I give myself a chance to battle back. I also give myself an opportunity to participate in afternoon moves that could make my day. Dropping the size and waiting until I see markets well keeps me in the game."