The great thing about creating and improving simple rules for trading is that it makes it much easier for you to learn their effectiveness. Without it, you too often delude yourself by believing, with hindsight, that you have learned something. (It is always easy to feel clever when you look back and think what you should have done). But when you had simple rules that you followed, you can observe when and how they fail, and make adjustments on that basis.

Anyways, the whole 5% rule I've made is to take advantage of the fact that most people seem to have their eyes and minds so fixated on spotting the next top, that they fail to take advantage of all the short-term gains that lie right in front of them :)