Would You Stake Yourself?
Hey everyone! 👋
Last week, we took a look at a hypothetical scenario, where a rich acquaintance of yours needed help deciding between two traders he's thinking about staking. This led to the question: "Who would you stake?".
This post will continue right where that one left off.
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After getting the contact info, you reach out to interview the two traders.
You speak with Trader #1, and he appears to be quite intelligent, with wide and deep market knowledge. He’s shown you a few market predictions that he’s already gotten correct, and walks you through how he finds opportunities. You’re impressed.
You speak with Trader #2, and he also appears to be quite intelligent, with broad market knowledge, in addition to a history of profitable investment/trade ideas. He walks you through how he finds opportunities, and, similar to Trader #1, you’re quite impressed. In addition, he also presents you with written details about how he plans to manage risk, his maximum drawdown, and a whole litany of other clearly defined rules that keep risk under control and quality trade ideas coming.
Assuming we are still in the position of choosing which trader to stake, most, if not all, individuals in this situation would pick Trader #2 because of his attention to preparation and risk control, in addition to having a ‘business plan’. Trader #1 may be smart and highly capable, but he’s shown no evidence that he has a process to continually generate good trade ideas while ensuring that he doesn’t lose everything. Trader #2 has “done the work”, and proven that he’s worthy of the capital.
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Whether they know it or not, anyone who manages their own money is constantly faced with the same decision. If you step outside of yourself, are you more like trader #1 or #2? Is your trading plan worthy of investment? Would you invest in someone else who’s taken the same trades that you have? Does that person have a plan? Have they “done the work”?
Keeping yourself honest about what is working and what isn't is a superpower!
Hopefully, this emphasizes the importance of building a trading plan. Next week we will take a look at what factors are typically needed in order to build an effective one.
If you’re not like Trader #2, comment below about the steps you’re taking to become better prepared for what the market throws at you!
-Team TradingView
If you missed last week’s post, you can catch up here:
Last week, we took a look at a hypothetical scenario, where a rich acquaintance of yours needed help deciding between two traders he's thinking about staking. This led to the question: "Who would you stake?".
This post will continue right where that one left off.
-
After getting the contact info, you reach out to interview the two traders.
You speak with Trader #1, and he appears to be quite intelligent, with wide and deep market knowledge. He’s shown you a few market predictions that he’s already gotten correct, and walks you through how he finds opportunities. You’re impressed.
You speak with Trader #2, and he also appears to be quite intelligent, with broad market knowledge, in addition to a history of profitable investment/trade ideas. He walks you through how he finds opportunities, and, similar to Trader #1, you’re quite impressed. In addition, he also presents you with written details about how he plans to manage risk, his maximum drawdown, and a whole litany of other clearly defined rules that keep risk under control and quality trade ideas coming.
Assuming we are still in the position of choosing which trader to stake, most, if not all, individuals in this situation would pick Trader #2 because of his attention to preparation and risk control, in addition to having a ‘business plan’. Trader #1 may be smart and highly capable, but he’s shown no evidence that he has a process to continually generate good trade ideas while ensuring that he doesn’t lose everything. Trader #2 has “done the work”, and proven that he’s worthy of the capital.
-
Whether they know it or not, anyone who manages their own money is constantly faced with the same decision. If you step outside of yourself, are you more like trader #1 or #2? Is your trading plan worthy of investment? Would you invest in someone else who’s taken the same trades that you have? Does that person have a plan? Have they “done the work”?
Keeping yourself honest about what is working and what isn't is a superpower!
Hopefully, this emphasizes the importance of building a trading plan. Next week we will take a look at what factors are typically needed in order to build an effective one.
If you’re not like Trader #2, comment below about the steps you’re taking to become better prepared for what the market throws at you!
-Team TradingView
If you missed last week’s post, you can catch up here:
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tradingview.com/share-your-love/
Read more about the new tools and features we're building for you: tradingview.com/blog/en/
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