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Trade versus Trader
By Darren Merwitz | August 15, 2007
What is more important - the trade or the trader?
In other words, is it more important to find a great trade, or is it more important to manage that trade efficiently. This is not something that I have the answer to, but is an interesting point to bring up none the less. Obviously both are extremely important, but personally, I feel that it tends slightly more in favor of the trader.
My logic is that a good trader can manage a bad trade effectively, but a bad trader can mess up even the greatest trade.
The main point I’m trying to highlight, is that developers of strategies often put an enormous amount of effort into selecting the correct opportunity to enter into a trade, and not enough into managing the position. Just something to think about during your strategy development…
Tags: Forex Strategy Development
Topics: Systems Trading Blog |
August 15th, 2007 at 9:55 am
I completely agree that it is the trader, not the trade. Though many novice traders can get lucky and make an excellent trade, it is usually the trader with a well developed and tested system that wins out in the long term.
March 9th, 2008 at 5:17 pm
I’m sorry but you could not be more wrong. If the only thing you hold on to is a developed and tested system, then you will lose in the long term but might get lucky and make money in the short. A good trader can enter a position on a coin flip and still end up positive due to proper exits and position sizing techniques. Systems never last forever and the market is continually evolving. Stick to the same game plan you had ten years ago and you will never see the current reality! You will also end up broke. The system is the least important part successful trading. More important are psychology and money management for long term success.