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Paul Rotter: A trader you should have no opinion. the more opinion you have, the harder gets it to get out of a losing position.
Quote from the Traders Magazine Interview 2004 Paul Rotter: The Worlds most Successful Trader
Q: Why don't you have any problems with closing out the position and even taking the opposite direction? Shouldn't a trader stick to his opinion?
A: No, definetly not. an analyst or some kind of gure has to stick to it, but as a trader you should have no opinion. The more opinion you have, the harder gets it to get out of a losing position.
One of the most used sayings in the stock market is “Trade what you SEE, not what you THINK”. Just wonder how many traders took this simple advice seriously and understood its real meaning. It they were, I am sure they would increase their trading profits multi-folds.
When reading through some of the trading forums, it is very common that the majority of traders seem to form a rigid opinion on how the market will perform in the future; something which I doubt many traders could possibly forecast correctly. That's why the survival statistics for would be traders in the share market are horrific it is said that 90% fail. In the CFD, Futures and Forex markets its most probably a lot worse.
If you Fail to Plan, then you Plan to Fail!
With trading the Financial markets, a Trading Plan is absolutely critical to your success. Professional traders are prepared for anything. They use a trading plan as a blueprint for their trading. They know exactly what they are going to do regardless of what happens in the market. There is no magic... it's simply that they have a plan of action which they follow.
If you don't have a trading plan yet, stop trading and do it now. It should include the following information.
- Setting your Trading Goals
- Defining your Markets and time fames
- Setting up your Trading Rules and Guidelines
- Setting Money Management Rules
- Designing Risk Management strategies
- Detailed Trading System design
More information about Trading Plan on Investopedia and Ed Seykota Trading Rules
Good Luck and Happy Trading!!!
