Trader Quote #31Posted: September 25, 2013
Trader Quote #31
“Common Sense is Not common practice” Rhonda Scharf
==== This is a great quote for all the traders reading. I guess, it is an adaptation of Voltaire’s classical quote “Common sense is not so common”. We as traders all know about the typical themes such as: risk management, lot assignment, technical analysis , fundamental analysis stop loss, limit orders, probabilities etc etc. and we are all well-aware that these are very important elements for successful trading, so the question is: Why is this common knowledge not a common practice in our trading overall? Why are there periods of time where we follow our rules by the book and then we go totally off-course?
Don’t feel bad if you have experienced this episode, I have passed through it and any serious trader who has been long enough in this business has lived it. The key is to not repeat it, right?
Knowing is not the same as doing! hahaha! there are many examples: Everybody knows how to lose weight but it is not the same as to always go too the gym and have a balanced diet etc etc. A typical trader knows that he must follow a risk protocol, stop orders but does he constantly execute it?
Doing takes time! Traders always ask me, why can’t I follow my rules all the time? I simply reply, habits take time to develop. Just as bad habits in trading seem to be “faster” to learn, “good” trading habits take time, a long time (but its worth it 🙂 ). It takes many repetitions documentation, learning from mistakes to progressively train ourselves to follow our book of rules!
Start by staring! If you are having problems following your own trading rules, my suggestion would be to first have a set of simple rules you understand and can execute (daily, weekly, monthly) with the appropriate risk management rules. If you don’t have any, investigate, learn, test and share your questions with the trader community to help you polish them,
The most important constant should be the constancy in Something! Common sense is not common practice, let your rules be common practice!
Please feel free to share your comments, experiences or doubts! Best of Luck in your trading and always use stops! Cheers, Dimitri =====