In case you haven’t seen it, I won’t give away the plot. But at one point of the movie, Clint Eastwood is with a young man in the garage and the kid is amazed by the amount of tools Eastwood has collected.
Nearing age 80, Eastwood is quick to remind the young man that those tools weren’t all bought at once – that his collection was slowly built over time on an as-needed basis.
Taking the young man to the hardware store, Eastwood buys him a tool belt and a couple of things he’ll need for a new construction job. Again, he reminds the young man that he will acquire more tools over the years as he comes to need them.
Every Trader Has a Toolbelt
So what kind of shape is your trading tool belt in? Are you locked and loaded, ready for whatever the market throws at you?
Or do you have just a couple of basics which you’re relying on with plenty of room for more on your hip?
It’s worth asking yourself, and taking a personal inventory as well as a strategic inventory for your trading will let you know which situations you should be involved in, and equally important, which situations you should be avoiding.
I use this analogy because it’s so obvious. There are many ways to skin the market cat, but you don’t have to know them all at once. Get really good at 1 or 2, and rely on them for consistency in the early stages of your trading career. But don’t forget to keep an eye out for new possibilities which are emerging around you – because they will.
And as you begin to notice more opportunities and situations to profit from, figure out how to (1) locate those plays, and (2) trade them in a way so as to appropriately manage your risk and maximize your reward. That’s crucial.
As you add the occasional new strategy to your tool belt, you’ll find it gets heavier over time, thereby enabling you to attack more and more situations effectively. Like a veteran. But don’t pressure yourself to get there overnight – it takes time.
Thanks for stopping by and I’ll see you here soon with more. Until then…
Trade Like a Bandit!
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]