In general, I find the less successful participants to be somewhat carefree in their limiting of risk, in their approach to the markets, overly confident in their decisions and without regard for the true potential for horrific losses. As any seasoned trader will tell you, the market knows no mercy. In the same fashion that it can yield incredible results, it can be quite punishing. Every trader has taken serious thumps and the truly successful traders are those that learn from their mistakes. For traders, their principal is their number one asset.
Nothing is more important.
Without it, they have no business. Think of your principal in the same regard as a world-class pianist might consider his or her fingers. While it seems overly simplistic, a trader's goal should be to maximize winners and minimize losers. Let your winners run and sell your losers. Water the flowers and pull your weeds.