The 3 Essential Elements in your Roadmap to Success
Having studied many professional traders, I found that there are 3 crucial factors that have led to their success. All these market wizards have found success because they have understood and mastered the 3Ms of trading – Method, Money and Mindset.
Method (chart-reading): Process by which a trader enters into the market, using either technical or fundamental inputs to make their decision
Money (risk management): This includes capital allocation, risk parameters (drawdown limits), risk-to-reward calculations (entry price, profit target, stoploss)
Mindset (psychology): Market psychology the most important part of trading, and determines how well you can execute your trading plan in the markets in real time
To many new traders who know of these 3Ms, they tend to make the mistake of giving equal weightage to all 3 parts (refer to above), or even worse, almost 100% weightage to the “Method”. The most obvious danger is neglect to the other essential parts.
In reality, a professional trader should allocate the 3Ms as depicted below here:
“Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones
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