Aeroplane Toilet Ashtrays and Trading

All airlines are non-smoking. (Although remember when you used to fly and there was a smoking/non-smoking section? Because of course smoke magically stopped at the non-smoking area!)

But they still have ashtrays on the toilet door. Right next to the no smoking sign…

It turns out this is federal law. Why do they do it?

Despite all the warnings, smoke detectors, and signs, one idiot will always break the rules. That’s human nature. And they’d rather have someone dispose of the cigarette safely in an ashtray than drop it in say a paper towel bin causing a fire risk. (Far more serious than a bit of cigarette smoke in the cabin).

“Alright Mark, cool story bro but what does that have to do with trading?”

Human nature is what it is.

We break the rules. We can be told a million times but occasionally that rule WILL be broken. The FAA knows this, hence the ashtray. They don’t want a rule break to bring down the whole plane. 

The same can apply to trading.

Rules are needed to keep you focused, but expecting you not to break one occasionally is not feasible. Expect to break a rule and prepare for it so it doesn’t bring down your whole trading account. 

Tactics like; ensuring you don’t have excess funds in your trading account is a great way to ensure if you break a risk rule, you don’t do massive damage. You don’t have the margin to go too wild. Have just enough to cover your margin and loss allowance for the week. Prune off any extra.

Today think about what rules you could still break, and how you could put additional protection measures in to limit the damage.

After all, you are human…