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Hi,
I retired some years ago, but I can still remember my most powerful
questions when I was a management consultant :
- what,
- why,
- and when,
- how
- and where
- and who.
The poem by Kipling is perhaps remembered for his "six honest men (They
taught me all I knew)", but perhaps not for another part of the same poem
where he said:
"But after they have worked for me, I give them all a rest."
Many find this approach works better for trading. I began to realise what
had worked so well for me in business, at commerce, was not appropriate for
trading. When I stopped asking so many questions, stopped being so
analytical, that time coincided with stopping losing money and starting to
enjoy my trading as well as making money.
Worrying about who did what, and with what motivation, and to whom or when
and predicting can get in the way of making (and keeping) profits at trading.
What works for most who make and keep profits seems to be acceptance of
what is - few or no questions, few or no forecasts, just acceptance of the
market as the perfect reflection of balance of buyers and sellers and being
of a mind-set to take advantage of whatever happens.
It is relative simple to demonstrate that those trading persistence in
markets (trend followers, momentum players...) are going after just a small
fraction of profits available to volatility players and are going against
the odds as well.
Perhaps that is why trend following etc. is often associated with high stress.
Perhaps that is why spreaders and volatility breakout players and market
makers comprise the majority of traders with regular profits of over 50%
p.a. - they do not have the stress of being wrong because:
- they make no predictions and suffer less OR
- they take advantage of being wrong to take higher probability trades.
Maybe it is time to put the six honest men to rest.
What do you feel? There I go again with one of the six honest men - this
time "What".
It can be difficult to give up old habits.
Unconditional regards, Ric.
www.traderscalm.com
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