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| Howard Tyllas |
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Trading Is an Art Form
There is much that is difficult for the spirit, the strong reverent spirit that would bear much: but the difficult and the most difficult are what is strength demands
-Friedrich Nietzsche, Thus Spoke Zarathustra
The act of trading should be approached from the perspective of an artist’s eye-view. Don’t worry, this doesn’t mean you need to be able to draw even a stick figure. It means, however, that trading is a creative activity: one that involves owning your own mind so that you are in control of it, working and reworking ideas, having the strength to be bold and the experiential knowledge to be so at the right times. At the same time, one must not forget that every creation implies destruction. Indeed, for there to be creation in the first place, one needs a free space upon which to do so. In order for a cleared space to exist, one must clear away the rubble of the last – in this case – trade. Thus, an artist-trader must also be a murderer: someone so fierce that he can put aside his emotional attachments to trades, whether they are past successes or failures, or present losers. In other words, just because you have a MBA does not mean you have an advantage over a gambler with a high school education as far as being a successful trader is concerned. Even though you have an advantage with regard to trading theory and trading lingo, it alone will not allow you to implement the things you learned. It is well known that a spectrum of people such as tape readers, gamblers, mathematicians, MBA’s, have been highly successful and also failures. I have come to find that the common thread for success is the ability to be an observer of one’s own trading, continue to do what works, and change or discontinue the things that do not. Furthermore, like many artists, successful traders often seek consul and advice to improve what they are doing on things they alone cannot see.
There are many approaches to become successful, and many ways to fail. You must first find an approach that allows you to be unemotional when trading, money management included, and the strategy that best fits your approach. If you are a trader that only day trades, that is one approach, if you overnight or swing trade, that is another approach, and if you position trade (long term) yet another. Some traders use one, two, or all three time frames. Some will trade any market, any time frame depending on the trade set up, and risk/reward for that trade. Decide on a time frame for your thought and ideas, then plan a strategy based on that and the risk involved.
Options have many bets with multiple odds that I compare to casino wagering. I like the fact that you can have strategies that allow you to be partially wrong and still make money, and if right do well. My mindset likes these facts and their ability to manage time, risk, and emotions.
Everything is like a casino wager including crossing the highway blindfolded at 4am has a better chance of success than at 4pm. You can see that common sense will tell you when best to cross and logic will aid you to the odds of every hour in between. The odds of something to occur is made clear with some option strategies, and that is what they are, the odds, not the real outcome. The odds change with price, time, and volatility. Certainly the risk/reward is defined in many strategies.
If you say I shouda, woulda, or coulda, what you are really saying is that you did not do what you were suppose to have done.
After you have the trade idea, choose the right strategy based on money management and risk /reward, and then have the discipline to execute your plan.
I have been in a trading pit and observed two traders, one was selling first and trying to buy back lower, and one who initiated all trades buying first wanting to sell higher. Sometimes they would both make money on the same day and sometimes they both lost. Sometimes one would make money and the other lose money. What this taught me was that execution was important, and doing what you were supposed to do will give you a better chance for success.
Do not trade to trade. This is a business, treat it like one. If you want to gamble you could go to Las Vegas and maybe get something free for doing so, trading futures you are a speculator, no free drink even. NEXT |
