“The cheetah, while the fastest animal on the African plain and can outrun any of the prey it feasts upon, always chooses to go for the young, weak, or sick. Once identified, he attacks with laser-guided focus and effectiveness. It is only then that the kill is most likely. That is the epitome of a professional trader.”
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rssTrade like a cheetah
I read a quote about trading a long time ago that went something like: “Trading consists of extended stretches of intolerable boredom interspersed with moments of sheer terror.”
No terror for me today but I felt like one of my favorite animals – the cheetah. Just sit with orders in the market wait for price to come so you can pounce on it.
Most people only pay attention to the speed of the cheetah because that part is exciting. But that part only lasts a few seconds.
What they don’t pay attention to is the fact that the cheetah spends the majority of its hunting time lying in wait and silently stalking its prey – “intolerable boredom.”
Waiting, and waiting, and waiting some more for the right situation to present itself.
Yes, that part is boring, but it’s also the most important part. It wouldn’t matter how fast the cat was if it just ran around without a plan. (more…)
The Virtue of Patience
Waiting for the right opportunity increases the probability of success. You don’t always have to be in the market. As Edwin Lefevre put it in his classic Reminiscences of a Stock Operator, “There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time.”
One of the more colorful descriptions of patience in trading was offered by Jim Rogers in Market Wizards: “I just wait until there is money lying in the comer, and all I have to do is go over there and pick it up.” In other words, until he is so sure of a trade that it seems as easy as picking money off the floor, he does nothing.
Mark Weinstein (also interviewed in Market Wizards) provided the following apt analogy: “Although the cheetah is the fastest animal in the world and can catch any animal on the plains, it will wait until it is absolutely sure it can catch its prey. It may hide in the bush for a week, waiting for Just the right moment. It will wait for a baby antelope, and not Just any baby antelope, but preferably one that is also sick or lame. Only then, when there is no chance it can lose its prey, does it attack. That, to me, is the epitome of professional trading.” (more…)