Why it is so Difficult to follow the Trading Rules?

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Old Aug 2, 2011, 8:11am   #1
 
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Why it is so Difficult to follow the Trading Rules?

Hi to All

Trading is a platform where human weakness appears in a very cruel form i.e. loss of money. (Money, money, money Always sunny in the richman's world).

The simple task of following the rules is so painful and difficult to say the least. But why?

Why it is so difficult to make rules to guide the trading?

Why it is so difficult to get out in a small trading loss?
Why it is so difficult not to get out in a small profit and let profits run?
Why it is so difficult to stay out and wait for the next opportunity) when the market has gone beyond the determined entry point fast and furiously?
Why it is so difficult not to regret a loss making trade?

The real trading edge comes when a trader is able to overcome the difficulty associated with his trading rules and consistently able to follow them.

The answer most probably lies in in the question "What is the real cause for this difficulty?"

Please share your opinions and experiences.


Trader 23
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Old Aug 2, 2011, 8:38am   #2
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Re: Why it is so Difficult to follow the Trading Rules?

I blame ABBA...
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Old Aug 2, 2011, 9:37am   #3
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Re: Why it is so Difficult to follow the Trading Rules?

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Originally Posted by Trader 23 View Post
"What is the real cause for this difficulty?"
Personally I'd say its just a lack of belief in (or understanding of ) your edge.
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Old Aug 2, 2011, 9:45am   #4
 
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Re: Why it is so Difficult to follow the Trading Rules?

Humans are psychologically hard-wired not to fail. Taking losses, getting out early and obeying rules which, on first sight appear to be an admission of failure, all go against the natural grain.

It's like working in an unnatural environment eg. underwater or in the air - you have to learn to do things differently. Experience in other fields shows that training and the reinforcement of routines is a way of changing hard-wired habits. Learn to do this with trading and you are in with more than half a chance.
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Old Aug 2, 2011, 10:04am   #5
 
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Re: Why it is so Difficult to follow the Trading Rules?

Quote:
Originally Posted by the hare View Post
Personally I'd say its just a lack of belief in (or understanding of ) your edge.
Exactly this!

Once you are confident in your edge and understand it, it's all downhill.
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Old Aug 2, 2011, 11:05am   #6
 
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Re: Why it is so Difficult to follow the Trading Rules?

It took me a looooooooooong time to get discipline but when you realise that you are hurting yourself over and over again and that the majority of your losing trades are due to rule breaks, it becomes easier. And about losses, if i trade my strategies and make a loss i don't care get stressed because i know i was doing what i agreed with myself and gave myself a good chance
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Old Aug 2, 2011, 11:47am   #7
 
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Re: Why it is so Difficult to follow the Trading Rules?

Trader 23 started this thread Yeah, rule breaking is the major cause of being a net loser.
And it is quite true than we are hard-wired not to fail.

When traders with some experience make a trading plan they know there will be two or three or even more consecutive losses and they are part of trading if we keep them small. These losses does not reflect failure in any way.

But still when we actually encounter 3 consecutive losses something changes and if the 4th one is also reflecting a loss then the tendency to avoid that loss becomes so strong. This is the time when it becomes so difficult to cut the loss.

It's relatively easy to contemplate 4 or 5 losses in a row. But when they actually happen somehow the mentality changes. The whole process of taking the 4th or 5th consecutive loss becomes such a difficult task.
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