Ask the soldier about it.
Running out of it on the battlefield is the soldier’s worst nightmare.
We’re soldiers too, in our respective fields of work.
Our liquidity is our ammunition.
What counts when an opportunity comes is how liquid we are.
When there is a market bottom, most of us are fully invested.
Is that sound strategy?
Putting together ammunition in one place is where it starts.
Holding on to ammunition and using it when most required – that’s sound strategy.
Saving habits lead to accumulation.
Barriers hold the accumulated liquidity in one place.
What are barriers?
Welcome to the world of self-created restrictions in an effort to have liquidity ready when one most needs it.
A dedicated bank account is what one requires first.
Link a bank account to your trading account, and use this one for nothing else.
Next, whatever accumulates in this account – take it away from your direct vision.
Block it as a fixed deposit.
This is a barrier. One don’t see the funds as available. Thus one don’t feel the urge to use them.
When a trade motivates one enough to be taken, one then most need the funds.
Break the FD.
Transfer the funds.
Has a trade just culminated?
Nothing else coming up?
Again, take the funds away from your direct vision.
Block them, either directly in your trading account, by putting them in overnight funds, or transfer them back to your bank account, if you know that you are not going to be trading for another week plus.
Both options are valid. Do either. Bottomline is, the funds should not show up as available until you need them.
Link a different bank account to your investing-only trading account.
Make multiple fixed deposits in this bank account, each one being one exact entry quantum in value.
Upon identifying an entry opportunity, whenever that happens, break one quantum’s FD, move the funds, and enter into the investment.
Liquidity needs to be revered.
Unless we don’t give it proper respect, we will not have it at our beck and call when the next opportunity arises, whether we are trading or investing.
Let’s go, let’s get our ammunition together, and let’s put it to great use.