So far, I’ve discussed the use of focus to bring intensity to our thought-process so that we can outdo our natural mind in order to follow the proper trading process.
What is the proper trading process again?
While I’ve mentioned cutting loss being a major factor in the proper trading process; it is not the mean to an end. In fact, cutting loss is only a part of the overall scheme in surfing the market wave.
Guess what, even for surfing, you have to deal with “wipe-out” which, to me, is no different than “cutting losses” in trading. Below is an excerpt from a lesson in wipe-out.
Get ready to wipe out. Wipe outs are an unpleasant but unavoidable part of the surfing experience. With time, you’ll get better at avoiding wipe outs, but for now, follow these basic steps to stay as safe as possible when one happens:
- Stay calm. A wipe out can be dangerous, but if you keep your head there is usually nothing to fear. Think clearly and act decisively to minimize your risk.
Except for the dangerous part, the steps involve here are perfect for cutting losses.
Here is a rephrase:
Get ready to cut loss. Cutting losses are an unpleasant but unavoidable part of the trading experience. With time, you’ll get better at minimizing losses (by knowing when to enter a trade), but for now, follow these basic steps to stay as safe as possible when one happens:
- Stay calm.
A wipe out can be dangerous, but if you keep your head there is usually nothing to fear. Think clearly and act decisively to minimize your risk of taking a bigger losses.
“Act decisively” is a very important key point here.
Even a highly skilled surfer get wipe-out from time-to-time; on the same token, taking losses are what successful traders do to protect profit and their portfolio.
I must say that I’m not an expert surfer yet in the realm of trading. As you can see from my daily journals, I’ve fallen off the wave plenty of times; but that does not preclude me from catching some nice waves from time to time. I’m sure the dedicated surfers out there at the beach will agree with me when I say that I will accept any and all wipe-outs anytime any day just so I can have an opportunity to ride that big wave to the end when it comes. Of course, in my case, I’ll take any small losses anytime any day just so I can have an opportunity to ride that big runner to the end when it comes.
Surfing the wave is an art and so is trading. The great surfer, even though his/her technical skills are strong, has to know the when and where to surf to maximize his/her enjoyment of surfing the big waves. They will travel to the proper beach at proper time to follow the big waves.
This is the same in trading. We have to know where and when to trade to maximize our chance of finding the next big trends/runner. Which beach to surf is as important as which sector to speculate. A perfect example is the recent shift of money flow back to the solar sector which The Fly has keenly alerted us.
Are you catching my drift here?
If you are a dedicated surfer, your whole life is about looking for the next big wave to surf. Your whole life is about improving your surfing skills. You go to the beach whenever you can. Your mind is always thinking of surfing. And when you surf, nothing else matter.
Do you see the simple truth here?
When you make surfing your life interest, your thought process naturally is very focused on surfing; nothing else matter anymore. Even your natural mind will be standing by the corner when you surf the big waves. For the surfer knows that the only way to ride the big wave is to be one with it. Anything less and you will be wiped-out.
In trading, we call it trading “in the zone”.
There you have it.
To bypass our natural mind to trade in the zone, what’s the better way than to take trading to the next level by making it a part of your life-goal?
It all comes down to your dedication.
My 2 cents.