A fascinating post by Eli Radke of traderhabits.com :
It is important to understand the difference between a prerequisite and an accomplishment.
Zero is the necessary minimum to achieve a task. Showing up to work is not an accomplishment it is a prerequisite for keeping the job. Trading has prerequisites that can be confused for accomplishment. Here are some:
Admitting you are wrong/made a mistake. Mistakes happen and you are going to be wrong. Recognizing them is the first opportunity to change the amplitude. And that pain, disgust, anger, loss is the fuel for change. If you are out of control than you wake up one day out of the game. The seeds of your thoughts and actions will eventually manifest themselves. Everything works for awhile but as traders we are looking for what we repeatably do. Admitting you are wrong or made a mistake is not an accomplishment it is necessary.
Following your rules. Discipline is necessary when conducting any experiment I say experiment because each day and each trade has the potential to be different. I have an idea how a trade is going to develop but anything can happen. If you are not following your rules you are never going to understand why it worked or not. Inability to follow your rules is an indictment on the rules themselves as much as on the trader. Following your rules is not an accomplishment it is necessary.
Preparing. You may or may not enjoy preparing. If you do not enjoy the preparation it is in part because you do not see the benefit. As a football player we practiced 5 days and played one game. This made it possible to react and not just make decisions. There is a huge difference in results with increased reaction time and being in the “moment”. Not to mention the mental energy it takes up. Once again, anything can happen and there is a chance that something new will happen. But preparation takes care of enough of it to make it pay off. You never know when the trade that makes your day, week, or month will present itself. Preparing is not an accomplishment it is necessary.
Post trade analysis (wins and losses). As a trader we are always asking ourselves what is working right now. You can never understand that without knowing why something worked or didn’t work. Just like with preparing, have a process and it will happen more quickly. Performing post trade analysis is not an accomplishment it is necessary.
Mental Awareness. There is no way to get rid of bias, we can only see and admit the risks that it presents. Even with algo trading you have to set the parameters. Understanding where you are at mentally or admitting to it is important. My best days as a trader or athlete were not the days I was most healthy. It was the days I got the most out of what I had available to me that day. I pushed at the times I knew it wouldn’t spin me out of control. I knew where I was and how to adjust. Most things can be overcome as long is there is awareness. Having mental awareness is not an accomplishment it is necessary.
I am sure there are other prerequisite as well (add yours in the comments). The purpose of this post was not to make anyone feel bad. There is something to be said about getting your prerequisites but that is just the start. I was at a high school the other day and there was a sign saying that graduation was a great accomplishment. For some it is but for most of the people it is not. I actually could not believe that sign exists, they were selling their students shorts. Just like anyone who confuses prerequisite with accomplishment. Prerequisites get you to zero.
Attaining prerequisites is not an accomplishment it is necessary.