Self discipline: Building blocks (Part 1)
A popular buzzword used is “Having a system.” This is just lazy marketing, or a broad stroke of what’s actually required…mental discipline. However, building this discipline requires certain elements when it comes to playing with the financial markets. A system gives you a plan of attack, and if things do not go your way, panic should not set in since the plan should be ready for it.
Ask yourself now; Is your plan ready for anything? If not, what are the weak points? Where are the strengths? Is your plan geared towards maximum return on equity, or is it geared for minimum risk exposure? What is your plan’s margin call, and does it correlate with your brokers margin call? I have met numerous personalities (EXPERIENCED TRADERS) who have been in the trade for years and actually got stopped out by their broker, losing them chunks of equity. Simply because they were not familiar with their broker requirements/deliverables.
There are so many ways to falter in this game, sometimes you feel you can never be fully prepared. The truth is, there is some truth in never being fully prepared since financial markets are controlled by the people who are highly motivate to TAKE money from us, not GIVE us money.
“What you cannot measure, you cannot plan. What you cannot plan, you are unable to manage.”
Take note, there are too many sources of information out there, ready to confuse and derail your gut feeling. When a ‘reputable’ bank talks about ‘price targets’ and ‘forecasts’, it is proven that their accuracy in predictions or so called ‘analysis’ of stocks is almost as bad as the general public. Analysts are paid to write content, and keep writing. Analysts are very rarely paid to be correct.