The Complete Strategy Trader
The complete strategy trader has learned to use advanced cash management
principles, trades multiple markets, and may trade multiple strategies in each
market.
The successful strategy trader realizes that the key to long-term profitability is
how the cash flow is managed, not what indicator is used. He is done with trying
to predict the markets and has stopped looking for the Holy Grail indicator. He
understands that strategy trading is not unlike most other businesses and, as a
result, has turned his trading into a sophisticated business based on sound
business principles.
Remember the great fish restaurant that I mentioned in Chapter 1. It opened and
immediately received rave reviews; it was ranked four stars (out of four) by all of
the restaurant critics. It was hard to get in at peak times because you always got a
great meal. Again, it is not the food that makes a successful restaurant.
Of course a restaurant needs a good chef and good food. But to stay in business it
needs much more than good food. Costs, service levels, and cash flow need to be
managed effectively. I realized that many successful restaurants have mediocre to
poor food (just visit any fast food joint). But they stay in business because the
management has mastered restaurant management, which has nothing to do with
the taste of the food.
Trading is really no different. Traders become successful because they understand
trading management. Trading management has nothing to do with indicators, but
has a lot to do with the details of managing trades and cash flow effectively. The
complete strategy trader can say, “Of course I need solid indicators, and I have
my favorites. But I think with what I know about trading now, I could make any
indicator profitable.”
Successful traders understand that to be successful and stay in business more is
needed than simply a great indicator.