Trading is not about making trades

As much as basketball is just about getting the ball into the net, trading is just about making trades.

Most people understand that basketball has more going on than people throwing a ball into a hoop. So then why do they delude themselves that trading is about pressing the buy and sell button?

In order to win a basketball game, you do not stand there and shoot free throws all game. You must communicate with your team, keep an eye on the enemy team, watch your positioning, process the dynamic of the game, etc. Likewise in trading, you do not just make trades all day – you must watch your position sizing, evaluate where your blind spot is, and manage your concentration of risk.

Winning a game of basketball is the result of all the hard work that you’ve put in prior to stepping on the court. Making a profitable trade is the result of your due diligence prior to putting on the trade.

Entering in to the trade is simply the last step in a series of equally important steps. 

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