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Here are some metaphors from various traders to describe the markets: |
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"The markets are like two armies in a never-ending series of battles. My job is to hitch a ride on the food truck of the stronger force." |
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"Trading is the ability to figure out what all the other traders are reading into the future." |
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"Every time I enter the market I feel like I just jumped into shark-infested waters, and I am their lunch. For me to make money, all my indicators have to be perfectly aligned." |
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"Trading is like a game of 'hide and seek' that children play. I wait quietly and patiently for the market to present a profitable opportunity to come and play!" |
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Which metaphor do you think I heard from a trader who had lost approximately $10,000 a day for the previous nine days, had wiped out his trading account, and was wiring in money to meet the margin call? Which trader has the best metaphor for trading? Which trader trades from stress, and which one trades from a more relaxed viewpoint? |
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I mention metaphors because they influence your perception, and your beliefs influence your metaphors. Metaphors influence how you decide to enter into a trade. Some professional traders like to catch a market low, others look at the chart and fundamental picture before getting into a trade, others look only at fundamentals, others read only the tape, and others look only at technicals. As you research the markets and begin to figure out how you will determine what trend the market is in, you will begin to develop your metaphor. As you find yourself explaining to others how the market works, be aware of whether the metaphor you are using is empowering or limiting. Your conscious mind gives you the ability to decide if you will use a disempowering metaphor. The trader who had lost money had a limiting metaphor. The hint that it was limiting was the serious negative connotation of sharks eating him and the fact that he said "all my indicators have to be perfectly aligned." Using any form of the word "perfect" sets you up to fail, since in the real world nothing is ever as perfect as it could possibly be, especially when you are using multiple indicators. Consequently the likelihood of having the discipline to wait for everything to line up is rather remote. This trader has a very difficult time entering the market. You would too if you thought you were jumping into shark-infested waters! |
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Very rarely will you find a methodology that has multiple indicators perfectly aligned. In many cases you will realize they were "almost" per- |
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