Never Lose More Than 10% of Your Investment - Jesse Livermore

The 10% loss rule became Livermore’s most important rule for managing money. In some respects, it is also a key timing rule, since it often automatically sets the time to exit a trade—when you have lost 10 percent or more of your invested capital, you must exit the trade .

Also understand that when your broker calls and tells you he needs more money for a margin requirement on a stock that is declining, always tell him to sell out your position. When you buy a stock at 50 and it goes to 45, do not buy more in order to average out your price. The stock has not done what you predicted; that is enough of an indication that your judgment was faulty! Take your losses quickly and get out.

Remember, never meet a margin call, and never average losses. Don’t become an involuntary "investor".