Interview: Capital preservation: The "secret" ingredient to successful trading

How do you stay in the game over the long haul?

For successful long-term trading, Glenn Neely reveals trading strategies to let profits run – and essential capital preservation strategies to cut losses short.

Here are just a few pearls of wisdom from this interview:

• "The only way to survive in this game long-term is to make sure you don't lose too much money when your strategy turns out to be wrong. If too much is lost, it's very hard to make it back."
   
• "You need to be careful about what the loss could be on a particular trade and make sure it's around 1% or 2%. If you do that religiously, you can be wrong quite a few times and still survive. Eventually, when you DO get into a good trade, it's very important not to get out too quickly, because you need to make up for the times you were wrong. That's when you need to let your profit run."
   
• "It's critical to keep your risk level low. … The focus should always be on 'What's the downside?' not 'What's the upside?'"