The importance of knowing the ground you walk
It is well known in military slang that knowing the ground you are on is essential before starting combat and succeeding in it; but I would say that it is the same way in every single thing in life that we can imagine, including the economy, investing and trading.
But what exactly does the expression "Know the ground you walk" refers to?
It does not refer to anything other than the fact of knowing your real possibilities at the present moment, it refers to knowing accurately where you are standing, for that knowledge implies seeing the advantages and disadvantages of your situation at that moment promptly. From that knowledge derives all the possibilities of success in every single ambit that you can imagine, because you will be able to anticipate or predict with accuracy the most probably future scenarios of whatever you're analyzing.
So the expression itself means, knowing your own situation. If you know your situation and analyze it without nuances of emotions and without passions or biases, then you have earned more than half the success you want it.
Let's talk about this regarding trading
The trader who knows exactly the ground on which he is treading, also knows exactly the limits of his capital, how to divide or distribute it appropriately, which investments are more profitable at certain times, which investments to make and when to make them, etc.
Then, that kind of trader is competitive because his ability make he knows how to fix the best possible support and resistance points, and with this, almost no situation that may arise in the markets will take him by surprise, because even if things vary a little, he will always know what to do, he will always have a viable option on hand.
Then emphazing, when the trader knows what he is doing, it is because he knows exactly where he is standing; he knows his situation, knows the advantages and disadvantages of their monetary and investment situation and they act on it.
We need to know that every trader that starts to fail a lot in the markets and to make constant losses in his operations, he has to stop and start analyzing exactly what is happening.
Because constantly failing in the markets denotes that the trader or investor has a dissociation from reality. If he insists on denying that situation, it can last indefinitely, or until he ends up losing all of his capital; But if he has the good sense to realize that there is something that he is not analyzing properly and that therefore makes him operate in the wrong way, then he will very surely end up reversing the situation in his favor and achieving success.
Any trader who does not know the ground he is treading will totally fail in the markets, because his actions will be wrong, imprecise and clumsy when it comes to the truth. The trader who does not know the ground he is treading, does not know what he is doing, and will end up undoing with his feet, the little good that he does with his hands.
Such a trader can only be described as negligent, incompetent and inexperienced, and a total danger to any capital, including his own.
In the other side, any investor who objectively and precisely analyzes where he is, can see the advantages and disadvantages of his situation and act more intelligently in the markets and getting the success. Then we need to know that the basis of the success of the best investors lies in the exercise and use of this quality.
Never forget it!
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