One of the funny things about trading is that you don’t have to be around very long to hear many cliché sayings. Things like “Let your winners run, cut your losers short”. A true saying; and probably the first one that you heard in your trading career.

Unfortunately, if you tried to build a career on cliché sayings, it is doubtful that you would experience much success. First, there are many sayings that may be true, but the saying alone, without more explanation does little more than get people frustrated. The saying used above, for example, is the case in point. It is a true goal, but it is an end, not a process. We all know we need to let winners run, and cut losers, but the saying does little to help us get there, leading to frustration.

Some sayings are just wrong, or misconstrued. The saying “You can never go broke taking a profit” is a good example. Traders who consistently take profits too soon without reason are setting themselves up for failure, despite the catchy phrase.

So what are some good examples? Two come to mind. First, ‘Missed money is better than lost money’. This saying is true, has some explanation built in, and addresses a serious problem for many new traders. An opportunity cost is cheap, for most traders the opportunity will return soon enough, often a better opportunity.

“Patience is a virtue” originates outside of the trading arena, but how true it is. When in doubt, wait it out. It is a close cousin to the favorite above regarding missed money. Remember, not all sayings are born of good trading; some are born out of frustration.