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I assume most of you are familiar with the 80/20 rule. As a reminder, the rule states that, for many events, roughly 80% of the effects come from 20% of the causes. Few examples: 80% of your profits come from 20% of your customers 20% of the people owned 80% of the wealth. 80% of your complaints come from 20% of your customers 80% of your profits come from 20% of the time you spend 80% of your sales come from 20% of your products 80% of your sales are made by 20% of your sales staff In software, by fixing the top 20% of the most reported bugs, 80% of the errors and crashes would be eliminated. So how does it apply to trading? If you go to your trading log, you probably will find out that 80% of your profits came from 20% of your trades. In the 1993-2010 period, the 10 best days (4% of all trading days) account for 50% of the buy and hold performance. I'm sure that 40 best days (20% of all trading days) will account for at least 80% of the gains, maybe more. Look at SteadyOptions performance page - a big chunk of our gains this year came from May, July and August performance. How does it help us? What many novice traders don't realize is that the best trading strategies are usually boring. You can wait months for that one nice winning streak, and then in couple of weeks or even days you make a year worth of profits. The trick is to survive during those "boring" periods which are 80% of the time. If you manage to be around breakeven (give or take few percent) per month during those periods, you will be glad that you were patiently waiting for that one winning streak. Going back to SO performance, I think our biggest achievement was avoiding big losses. Sure we made some mistakes (mainly holding few trades through earnings), but overall, our drawdowns have been minimal so far. Patiently waiting for the next winning streak proved to be very rewarding. To conclude, I wanted to share few interesting posts discussing the 80/20 rule and how to apply it to trading: http://www.thecrossh...-stock-trading/ http://www.tigershar...ding/Page1.html http://www.mrswing.c...rading_916.html Would love to hear your thoughts.