The 3 legged milking stool..

Discussion in 'Trading' started by Pipman, Mar 29, 2004.

  1. Pipman


    I heard a guy use the analogy of a 3 legged milking stool to describe a successful business.

    If any leg was missing or weak the stool falls over.
    In this instance the legs were
    1. Marketing
    2. Finance
    3. Technical know how of the actual business.

    If trading is a 3 legged milking stool, what are the legs and why?
  2. Execution
    Good Analysis/System "edge"/positive expectancy
    Confidence to trade
    Good soft/hardware/platform backup/infrastructure

    Not necessarily in any order, but I guess this stool has more than 3 legs.

  3. It's arguably the same:

    1. Marketing = charts/data/indicators
    Finding pent up supply or demand is the name of the game.

    2. Finance = trading account/money management
    A given.

    3. Technical know how = your system
    'System' is used broadly here and includes all of the
    psychological aspects of applying a system too.

  4. Alexander Elder talks about 3 legs of stool to be a successful trader: psychology, technical analysis, and money management.