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The Marshmallow Challenge

From Theory To Practice

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The Marshmallow Challenge is a team building exercise that has been used in the corporate world for quite some time. In the challenge, teams of four are given spaghetti sticks, tape, string, and a single marshmallow, and they are tasked with the objective of constructing the tallest structure possible. The only caveat? The structure must be able to hold the marshmallow on top.

As traders, we can take the principles from The Marshmallow Challenge and use them to help us identify our weaknesses. Effectively, we are continually firming our own structures by adding more knowledge, new skills, and improved abilities. Throughout the process, we will test the strength of our foundation by metaphorically placing our marshmallow atop the structure to see if we are ready to trade successfully and consistently. Almost without fail, we will find early on that our foundation was lacking in some way before we build the structure that finally holds strong.

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