1. is it common sense that with a rudder down you will get issues with waves from the side? or am i doing something wrong? How can i overcome this?
Learn steering strokes. Once you have skills to paddle in waves you won't need or want the rudder. In coastal paddling, no one uses a ruddered boat or if they do is stays in the stowed position. Deployed rudders end twisted piles aluminum the first time you get side surfed into the beach.
2. Do most people use the rudder to actually steer or just to counter the current from straight tracking?
They are useful for keeping the boat tracking straight in cross winds and racing when you don't want to lose any speed using steering strokes.
PFD's (Life Jackets)
1 Canoe/Kayak Trailer
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