Practice plan - Step 1. The Rules

I have read about 3/4 of Trading from Your Gut: How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader again. I got to chapter 7 and just had to start putting this to work.

Again - to recap, the author of the book was one of the strangers Richard Dennis recruited to teach his trading methods to. In the beginning of this chapter, Mr. Faith writes:

'Richard Dennis - at the very height of his fame for having turned $10,000 into an estimated $200 million - gave 12 strangers only two weeks of training in his methods in year one of the Turtle experiment. Then after 20 days of practice trading - for many of us, it was the only trading we had ever done - he gave us millions of dollars of his money to trade. The following year, he again trained some new traders, but he reduced the training to a single week. The amount of left-brain knowledge that one can impart in a single week is fairly limited. Dennis obviously did not believe that trading was complicated.'

Pretty cool huh? The thing is the plan. And this is the start of my practice plan.

First, the rules:

1. Trade with an edge - Make sure that you have a trading strategy that will make money.
2. Manage risk - Don't trade with so much leverage that you risk losing everything.
3. Be consistent - Do this to reap the benefits of your trading strategy.
4. Keep it simple - Don't try to make trading more complicated than it actually is.

Anyone else notice the similarities to Scott's philosophy? In fact, the more I become aware of and read about successful traders, the more that I find they all promote a very common theme. None of this is new.

For me personally, I have had a difficult time with various aspects of the theme. Most recently, it has become evident that I simply don't have an edge. I think I have realized this for some time, but after reading more about what constitutes an edge in this book, my lack of a definable edge has turned into the obvious.

I will end this post with another quote:

'... the actual left-brain knowledge required to trade our method - and most other methods that work in trading - is relatively small, deceptively small.'

Before you know it, I will probably have this entire book scattered across this blog. Heh.