Preparation - The Key to Success as a Trader
Updated: Jun 26, 2020
“By failing to prepare, you are preparing to fail.”
Being prepared as a trader can mean the difference between success and failure. Preparation has been shown to increase self discipline, strategic thinking, resilience, and self confidence, all of which are key attributes to being a successful trader.
Being prepared can change the way we think, the way we observe, and the way we react. When we are prepared, not only do we learn more, but we are more aware of our surroundings. We’re also more apt to listen to others, be more alert, and have increased focus.
By just taking a few extra minutes a day, you can help prepare yourself for whatever the market throws at you. The best way to do that is to build yourself a morning or daily routine to get your head in the game before the opening bell.
The best example of a daily routine is that of Benjamin Franklin. The picture below shows the format that Franklin used everyday to prepare himself for the day and to execute accordingly.
Source: The Autobiography of Benjamin Franklin (Dover Thrift Editions) by Benjamin Franklin
“Early to bed and early to rise makes a man healthy, wealthy, and wise." ―Benjamin Franklin
Franklin was an early riser. He gave himself three hours of preparation for his day, every morning, before his work day even began. As traders, it's important to be focused and ready when the market opens, as we have to adapt to the market in real time. Giving yourself time to prepare before the market opens can really help you get into the right mindset and give you an idea of what the market will offer that day.
Following this format or even creating your own, along with being diligent with your routine, will help you on your way to becoming a prepared trader. Not every trader will have the same routine either. Every person will have something different that works best for them and helps them to get prepared for the day.
As traders, we want any advantage we can get on the market. So, that extra bit of focus, self confidence, resilience, or better strategic thinking that being prepared provides is definitely of value to us as traders. Just look at the past few months for example. They have been very unpredictable, with lots of ups and downs along the way. During this time, many traders lost their composure, panicked, and made rash decisions resulting in detrimental losses.
Trading is a mental game. This is what most traders fail to realize and it's also what is so detrimental to their trading careers. Anything we can do as traders to improve our mental stability is well worth the effort and time, which in this case is preparation.
Just think how much easier it will be to trade when you commit time to being prepared. It will help you to stay calm, cool, and collected throughout the day. This results in smarter decision making, better self confidence, and a more focused mindset. All of the attributes that have been mentioned are vital to your success as a trader. Take the few extra minutes a day and prepare.
As said by Alexander Graham Bell (the inventor of the first practical telephone) :
“Before anything else, preparation is the key to success.”