Aretha Franklin and Trading Rules

On this day in 1967 the classic song “Respect” by Aretha Franklin was released. Although not exactly about the markets there are three lines that make me think Aretha was considering trading as a back-up to her music career if things didn’t quite pan out. She belts out —

I’m about to give you all of my money
And all I’m asking in return, honey
Is to give me my profits

How many traders out there have said something similar to their trading screens when things are not quite going their way? I know I am the first to raise my hand and admit ‘talking to the market’. However the key to trading or investing success is rooted in the title of the song…respect.

Whether it is respecting the financial markets and that the irrationality that the market is ‘wrong’ compared to the direction you think it should be going can last longer than your capital or possibly respecting that the financial markets have a place in society that allows capitalism to flourish.

Probably the most important aspect of the word respect and trading is for those that have rules in place when they trade. If you develop a system or a rule based method for trading, you need to respect those rules.  For many traders nothing is harder than taking a loss, again I raise my hand in admission of this weakness.  But if you have rules in place and you do not respect your rules why have the rules at all?

I think this is really what Aretha Franklin was trying to say —

You can break trading rules and get away with it
But eventually the not respecting the rules will break you
Respect the rules