Sun Tzu wrote the book on battle preparations, claiming that battles are won and lost BEFORE swords are drawn. Why? Because preparation is key to success. Knowing when, where, why, and how to fight is more important than the weapons used to fight. Too many traders search for success while in the heat of battle, trusting that their instinct or higher education or technical knowledge of this indicator or that price pattern will guarantee victory. However, seasoned, successful traders have discovered that the battles in the market begin and end in the mind.
Those traders who suffer defeat in one too many battles, never to fight again, do so because they refuse to prepare for the uncertainty inherent in the markets. They choose instead to “shoot from the hip” with a gunslinger mentality. Battlefields change. The stock market is in a constant state of change. Those who win are prepared for these changes knowing that no two battlefields are alike. They are prepared with a plan of attack for any market condition. They prepare to win battles and they prepare to lose battles, knowing that defeat in battle does not mean ultimate defeat in the war.
Who will win and who will lose? It’s fairly simple isn’t it?