My Dad used to say, "Don't plant more lawn than you want to mow". I believe when he first said this he was designing new landscaping for his home and was trying design a lawn free landscape, which he did accomplish and won an award for the landscape design. But, that slogan stuck with me for years to come. In trading remembering that simple phrase can put me back on the focus I should be on.
It's not so difficult to think that any one trade is absolutely going to be a winner. That in itself can be a temptation to put on a larger position than should be. To translate my Dad's slogan to trading it would be something like; Don't put on more position than you want to see go in the toilet".
Even though I use specific pattern recognition that does tend to repeat I always have to remember that each trade and each moment in the market is unique. Mark Douglas talks about this in his classic book, Trading in the Zone. If we truly believe this fact then we understand that the outcome of each individual trade is random and that if we have an edge in our trading and trade that edge over and over we will come out ahead.
Leslie
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