“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.”
Archives of “prey” tag
rssMarket is like a woman
One is amazed by the similarities between the market and the femme fatale. Especially when you continue to chase the market with expectations of a reversal that never comes.
The more you chase it, the more parabolically it goes up. No matter how you count or look at indicators and candles, it simply goes up. When you finally give up, that is when the market surprises you once more with a sudden reversal and drop of prices.
In same way, you chase the femme fatale and that keeps you hooked and brings you near self destruction and obsession. When you finally give up exhausted and frustrated, she gets back at you once again. Looking for her prey…
Mastering the Trade, quotes by John F. Carter
The quotes below are provided by John F. Carter, master day trader; pulled directly from his new book Mastering the Trade.
I had just completed this book today evening and this is 2nd time read this book.
This may be the best quote of all:
“The financial markets are naturally set up to take advantage of and prey upon human nature. As a result, markets initiate major intraday and swing moves with as few traders participating as possible. A trader who does not understand how this works is destined to lose money”
“The financial markets are truly the most democratic places on earth. It doesn’t matter if a trader is male or female, white or black, American or Iraqi, Republican or Democrat. It’s all based on skill.”
“A trader, once in a position, can deceive himself or herself into believing anything that helps reinforce the notion that he or she is right”
“…professional traders understand this all too well, and they set up their trade parameters to take advantage of these situations, specifically preying on the traders who haven’t figured out why they lose”
“…markets don’t move because they want to. They move because they have to.”
“After all, the money doesn’t just disappear. It simply flows into another account – an account that utilizes setups that specifically take advantage of human nature.” (more…)
Trade 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…)
Mastering the Trade, quotes by John F. Carter
The quotes below are provided by John F. Carter, master day trader; pulled directly from his new book Mastering the Trade.
This may be the best quote of all:
“The financial markets are naturally set up to take advantage of and prey upon human nature. As a result, markets initiate major intraday and swing moves with as few traders participating as possible. A trader who does not understand how this works is destined to lose money”
“The financial markets are truly the most democratic places on earth. It doesn’t matter if a trader is male or female, white or black, American or Iraqi, Republican or Democrat. It’s all based on skill.”
“A trader, once in a position, can deceive himself or herself into believing anything that helps reinforce the notion that he or she is right”
“…professional traders understand this all too well, and they set up their trade parameters to take advantage of these situations, specifically preying on the traders who haven’t figured out why they lose”
“…markets don’t move because they want to. They move because they have to.”
“After all, the money doesn’t just disappear. It simply flows into another account – an account that utilizes setups that specifically take advantage of human nature.” (more…)
The Trading Beast
The markets are no place to be unsure of yourself and wishy-washy, it is not a place for 2nd guesses, wishing, hoping, or gambling. If you want to win in this jungle you need to be an unstoppable beast .
Complete confidence in your system and method. You do not jump around in your trading or doubt yourself, it is not about you, it is the system. Either it wins long term or it doesn’t. Either you have confidence in it or you don’t, make up your mind.
- You control risk. You do not expose yourself to being ruined because your bet size is consistently what you are comfortable with. Ten losses in a row is only a small draw down. If you are not afraid of ten losses in a row, what is stressful? NOTHING.
- You play follow the leader. You are not the lone wolf, you are going with the market not trying to predict it. Your entries and exits are based on historical patterns not your personal opinions, you are not trying to beat the market you are trying to be on its side, it always wins.
- You will not quit.Your exit strategy for your trading career? Never. You plan to never quit playing the greatest game on earth. You are a trader, that is what you do. Not quitting in most areas of life means that you eventually win big, the market is no different.
- You don’t need a guru. Your winning system is your guru. You don’t need to ask for a fish, you know how to fish. You only listen if you can learn how to catch more and bigger fish and somebody is a better fisherman than you.
The markets eat up lambs, chickens, pigs, and sloths. However beasts eat well off their prey.
FEAR
Fear is a misunderstood emotion, and one that gets a pretty bad rap these days. We owe our survival as a species to the hard-wired fear that kept us safe from physical threats for hundreds of thousands of years.
But what about the litanies of fears that plague traders every day? Fear of losing, of watching profits disappear, of making mistakes, of missing out?
Perhaps the larger question is this: If almost every trader feels fear, why do millions of people continue to trade? The answer lies in the way that fear is perceived.
For many, fear is a predator that’s constantly lurking, sneaking up on them, ready to attack at any moment. In this mindset, they’re always running away from fear, crouching in a corner, or looking for a safe place to hide. Fear blinds them to opportunity.
For others, fear is the prey. They move steadily and with discipline in the direction of the fear — always keeping it in front of them. As they approach the fear, they see it for what it really is.
F.E.A.R.: False Evidence Appearing Real. They see fear as something to go through in order to get what they desire — better trades and more profits. (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…)
Always Be Learning
When you love to do something, you enjoy learning more and more about it. Most active traders would rather trade than do just about anything else. Do we enjoy the learning? Depends upon how we come upon it. When something is a core value, our fascination with learning more about it is endless. You can’t get enough of it. However, when we learn through painful experience, such as the hard knocks of trading, enough certainly is enough.
Losses are tough. Errors and mistakes are bothersome. And, yet there’s almost always a lesson in there if you remain alert to improving. I’ve always said that mistakes are okay if you acknowledge them and learn from them. James Joyce said, “Mistakes are portals of discovery.”
As I trade and make mistakes, I say to myself, “I don’t have to do that again.” And I feel reassured and optimistic about the future. Of course, I do, “do that again”. We all do. There are certain default attitudes and positions we naturally fall prey to. But with an attitude of learning, we do it less and less until we (hopefully) stop repeating the unhelpful thinking and behaving. (more…)
In Search Of Emotional Discipline
