Ernest Hemingway-The Old Man and the Sea

‘The Old Man and the Sea’ is my favourite work by Hemingway. Here are two quotes that have direct parallels with trading:  

He looked down into the water and watched the lines that went straight down into the dark of the water. He kept them straighter than anyone did, so that each level in the darkness of the stream there would be a bait waiting exactly where he wished it to be for any fish that swam there. Others let them drift with the current and sometimes they were at sixty fathoms when the fishermen thought they were at a hundred. But, he thought, I keep them with precision. Only I have no luck any more. But who knows? Maybe today. Every day is a new day. It is better to be lucky. But I would rather be exact. Then when luck comes you are ready.’ 

And the great sea with its friends and its enemies. And bed, he thought. Bed is my friend. Just bed, he thought. Bed will be a great thing. It is easy when you are beaten, he thought. I never knew how easy it was. And what beat you, he thought. ‘Nothing’, he said aloud. ‘I went out too

Trade To Win, Not To Lose!

TradetowinWhen athletes are consumed by not losing rather than by winning, the game is over, often before it has even started. The same precept applies to trading. As crazy as it sounds, most traders aren’t making the money they could be — and the reason, I’d argue, is the fear of losing it. Traders are far too worried about giving money back. This paralyzing phobia can transform talented, elite professionals into disappointing underperformers.

How many times have you been up in a trade and started to think about the money? Your head tells you to bank it quickly and then play it safe. After all, you made your mark for the day, or even the week, so your job is complete. That’s not the mark of a trader; that’s the mark of an accountant.

 Trading is an occupation based on fleeting moments of opportunity. (more…)

Extension & Retracement patterns

  • Extension patterns are Bullish Butterfly, Bearish Butterfly, Bullish Crab and Bearish Crab.
  • Retracement patterns are Bullish Gartley, Bearish Gartley, Bullish Bat and Bearish Bat.

These are the patterns that I used, and the list is not exhaustive. The “hardcore” harmonic traders might look at more patterns such as 5-0, Shark etc and in more time frames.

So here are the key factors I am looking at when using harmonic patterns

  • Identify key market levels, in other words, key support resistance levels. This one of the MOST important step.
  • Identify established price channel. A channel also represent the current trend, applying the appropriate patterns to follow the trend.

EXTENSION PATTERNS
 

RETRACEMENT PATTERSNS

Technically Yours/ASR TEAM/BARODA

Ernest Hemingway

‘The Old Man and the Sea’ is my favourite work by Hemingway. Here are two quotes that have direct parallels with trading:  

He looked down into the water and watched the lines that went straight down into the dark of the water. He kept them straighter than anyone did, so that each level in the darkness of the stream there would be a bait waiting exactly where he wished it to be for any fish that swam there. Others let them drift with the current and sometimes they were at sixty fathoms when the fishermen thought they were at a hundred. But, he thought, I keep them with precision. Only I have no luck any more. But who knows? Maybe today. Every day is a new day. It is better to be lucky. But I would rather be exact. Then when luck comes you are ready.’ 

And the great sea with its friends and its enemies. And bed, he thought. Bed is my friend. Just bed, he thought. Bed will be a great thing. It is easy when you are beaten, he thought. I never knew how easy it was. And what beat you, he thought. ‘Nothing’, he said aloud. ‘I went out too far.’

Trade To Win, Not To Lose!

When athletes are consumed by not losing rather than by winning, the game is over, often before it has even started. The same precept applies to trading. As crazy as it sounds, most traders aren’t making the money they could be — and the reason, I’d argue, is the fear of losing it. Traders are far too worried about giving money back. This paralyzing phobia can transform talented, elite professionals into disappointing underperformers.

How many times have you been up in a trade and started to think about the money? Your head tells you to bank it quickly and then play it safe. After all, you made your mark for the day, or even the week, so your job is complete. That’s not the mark of a trader; that’s the mark of an accountant. 

Trading is an occupation based on fleeting moments of opportunity. They’re here one second, gone the next and entirely out of anyone’s control. The best traders love this, and even crave it. When the action is on, they’re prepared and trained to strike hard, as they have no idea when the next great trade will appear. 

It’s akin to fishing: You can be out on the water all day and not get a bite, but when you hit a school of tuna, you better have your rods ready and baited to maximize the opportunity. All that matters, ultimately, is how many pounds of fish you caught, not how long it took to reel them in. 

The key is to force yourself to step outside your comfort zones.

  1. Develop guidelines that will require you to increase your position size.
  2. Should you fail to follow your rules you must impose severe consequences.

The goal is not to change your personality or eliminate your fear, but rather the purpose is to get you out of the comfort zone of hording money.

Money in itself is useless, unless it is put to use!
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