Today i would like to talk about something that i love, analogies. Analogies are great to explain a point very well.
Analogies
I love the boxing analogy.
Trading <> Boxing
on impatience:
Trading:
If you are impatient you will over trade and if you trade especially in volatile markets you will kill your profits and end the day with a loss. You will also lose a lot of energy.
Boxing: If you are impatient you will punch a lot and waste a lot of energy. You will be more vulnerable now (KO maybe?)
on rushing to trade after a loss to recover profits/money management:
Trading: You can blow your bank or get a very large loss.
Boxing: if you get hit(loss) by a punch, if you try to punch right after with less awareness you will be much more vulnerable to get KO'ed or get hit by a strong punch.
On following a profitable pattern is obvious too.
So think like a Boxer. Like if you are in a fight.Think about the consequences of your actions. If you are trading tennis, think fast ;P.
So, make your analogy, if you have some behavior problems in trading. It might help or not.
Philosophy
I would like to offer you two philosophies that i follow and i will try to explain them:
Practical Philosophy
Trading like a journey or a number of steps that you have to make. Imagine that you have a goal of making 10000€ in 4 months starting bank with 100€ or 200 €. Maybe you would feel a bit overwhelmed, so for example, what i usually do in my trading is to think of the journey in steps. If you don't have the skill to profit bigger amounts, make it in hard work. You can still beat everyone. Larry Bird (for the nba fans that read the blog :) ) is a great example of that. So think about it like this, can i follow my money management rules and make one euro? I bet you can. Can you do this 10 000 times? I bet you can and with time the compound effect will help you.
The same rule applies to bigger amounts. I have 30k€ and i want 100k€ and say that your average profit/loss trade is 100€. 100k-30k= 70k € > 70000 € / 100 € = 700 steps. Can you make this 700 times? It's up to you.
Mental Philosophy
"I don't mind waiting."
I don't mind waiting. You follow your rules and you get a normal 100€ loss for example, i don't care if it looks like i am more far from my objective/goal, because if i have infinite impatience i know i will achieve my objective one day, if i am following my trading plan and rules.Your objective might come much earlier or not.
I hope you like the post and if you have any questions or liked this post leave a comment
or email to babypuntz@gmail.com
Free time section coming soon.
good trades
r9
