Ride the wave
Imagine this:
you are on a boat, the sea is in tempest. Dark, thick clouds hide the stars and the moon, it is a downpour of rain, only lightning flashes light up the way every now and then. The sails are tense to the max from the winds, the ropes like violin chords, your men are fatigued and drenched wet. You can barely hear their screams over the roar of the raging sea. Waves upon waves keep hitting the boat sending it left, right, upside, and then down.
You keep trying to make way, holding with all your strength to the wheel, but you feel the sea is about to swallow you and your whole boat. Your precious cargo of gold is what was going to save you from sure bankruptcy, and now it’s about to be sent to the abyss with you and your whole crew if you don’t manage to steer the boat out of this this hell. The sea doesn’t care about you, it rages on and on and the rain is neverending and the wind is ripping your sail and you feel desperation, and your heart is beating like a machinegun.
Now, imagine something completely different:
You’re on your surfboard, the waters below you feel charged with the promise of good waves, you feel the familiar sensation of salt on your lips, the warm sun on your wet hair. You feel confident. You checked the wheather yesterday, today should be great for waves. You are ready for this. You start to feel the wind picking up strength, slowly then suddenly the water starts making waves. You’re not in a hurry, you wait. You know what you want, you know what you’re waiting for. Manila from the tiki bar at the beach is looking your way, she smiles and waves hi, you smile back. Here it comes, you stand up then crouch down on your board, oh this wave is gorgeous, here she comes. You start riding it, up up up then diagonally through the crest of it, the foam at your feet. It’s perfect, you feel almost like flying for a moment, nothing else exist, it’s you and the wave and the board is an extension of yourself. You waited, you conquered it, it was beautiful and it was fun, and you are ready to do it all over again.
When we think about trading, we instinctively think of it as the first image:
the markets are in constant turmoil, they go up, down, sideways, gently then crashing, and they slam you up and down and left and right and leave you all wet and impoverished. It’s hard to figure out which way the charts will go, and sometimes they just change direction suddenly and without apparent reason, only to go where you thought they would, after you close your positions at a loss.
What instead should be your attitude, is more that of the surfer:
You don’t need to be constantly in a position, trying to figure out every moment if you’re going the right way. As a trader, you should look for trades. Big difference.
Looking for trades means studying the charts, yes, and map out levels of interest, where you will be wanting to play. There is a big difference between “from here price will go there”, aka a predicition of the future, and “if price comes to this level, this is important because X, and I am willing to bet Y on outcome Z”. That is your job.
You must know how to surf, and that is knowledge and practice, but then, you should check the forecast, and feel the waters, and wait for your wave.
When your wave comes, if you are ready, and have the balls to execute on your idea, it’s time to ride that wave, baby.
And once that’s done, you look for the next one, with a smile on your face.
Good luck, see you in the orderbooks.
– Heart