Even though the Midwestern United States is a hazardous place to live due to inclement weather, people continue to build there. Why? Because despite the risks, they find value in being there. So what do they do? They build strong foundations that can weather the storms.
Trading Plan (Blueprints)– Before you start your trading journey, you have to have a strong plan to assure that you don’t suffer emotionally or financially. Your trading plan will be your guide, and when things get rough, you’ll always know that you will make it to the other side.
Education (Building Blocks) – Without the necessary building blocks, a new trader will never be able to rise above mediocrity. It’s important to spend the necessary time learning the craft both before you begin trading, and as you continue to grow in your career.
Risk Management (Insurance)– Risk management is your insurance against ruin. No one spends time in a dangerous environment without having some form of insurance. Your risk should be no more than 1% in any one trade, and no more than three trades open at any one time.
Psychology (Peace of mind)– In order to trade in a dangerous climate, you have to stay calm at all times. By not trading out of your comfort zone, or risking too much, you will be able to stick to your plan and avoid mental and emotional stress.
Remember that there have been many storms in the markets. If you build a strong foundation and stay focused, you will soon realize that this storm shall pass, and eventually you will see the rainbow.