The most important part of trading is to make money

I was over at Ickos' Alsi-Trader blog and came across a pretty recent post from him about "Becoming a better trader".

One of the comments that he made was: "To become a profitable trader one must invest time. First on to do list is to read as many books as one can."

My personal opinion is that this idea of becoming a good, better, best trader is questionable at the best of times and the one thing that is more important than reading books is to make a profit and retain it!

Simple example - a trader starts with R1000 - he makes a 15% profit - what does he do with that profit?

A) Bank it and trade up with R1150 next time?
B) Put the profit in the bank?
C) Invest the profits in an index tracker or a blue chip share?
D) Put their profits into their bond and settle debt / grow other asset classes?

To me, knowing how you are going to protect your profits is something only you can learn and decide and too often it is left till last in order of importance while traders pursue larny systems.

I'm a big believer that many traders spend way too much devising, back-testing and developing systems and spend far too little time working out how they are going to protect

How many traders are cussing and cursing that they were stopped out of long gold trades on Friday? (Or will be on Monday). I am pretty sure that few people or systems could fault you being long gold until WHAM! that jobs number comes out and you are blown out the water.

(Yes you should remember the rule that it is dangerous to trade around data but if that were the case then most of you would be out the market 75% of the time.)

No trading system in the world is going to protect you from random events (9/11 for example or a "whopping" jobs number) - but you can certainly protect yourself by making sure you know what you are going to do with your profits as you make them.

THE POINT OF TRADING IS TO MAKE MONEY - IF YOU DON'T KNOW WHAT THE SCORE IS THEN YOU'RE A GAMBLER.