I know this has been addressed to some extent on other psychology threads, but perhaps a separate thread should be devoted to the metaphors we use to visualize our endeavors. Here are a few of the ways I visualize the trading process. Trading: is like being at the cottage and deciding I'd rather be on the other side of the lake. When I go down to the water it's calm, like glass, and I can see my reflection on the surface. We have several boats that I could use so I have to choose the best vehicle for my purposes. Before I leave dock I have to prepare properly. Sometimes the water can become unexpectedly rough, so it's best to pack anything I might possibly need in the event of an emergency. Adequate preparation is essential. After that I simply enjoy the trip. Getting wealthy and taking losses: is like when you get on the subway to go from point A to point B. The Tokyo subway system is very large and even native Tokyoites make mistakes from time to time. If you end up going the wrong way it's possible to ride the train until the very last stop then head back - but only a fool would do that. Once you realize you're on the wrong train it's best to see what you can do to rectify the situation. Usually this means getting off at the next stop and finding the proper train to be on. Anyway, I'd love to hear how other people think about what we do.
For me, it's fishing. I look at the overall market direction first (tides). Based on the markets are doing, I decide if I should fish (go long), dig for clams (short), or work on my tan (do nothing). Then I figure what tackle (strategy) should be used. This is either swing trading long, or using bear market mutual funds ( I trade an IRA). After that, I look for where the fish are, or start clamming. Losses? Lost lures. The cost of participating. Kevin
Hmmmm... what if we could change the game of golf to be more like trading???? <b>The new rules of NYSE golf:</b> 1. The course consists of 3000 different holes - players get to pick which hole(s) they want to play 2. Each player has at least one pair of balls, a "buy" ball and a "sell" ball 3. Some players have only one pair of balls, while other players have entire buckets of thousands or millions of balls in play at the same time. 4. To begin, each player tries to hit one or more of their balls (either buy ball(s) or sell ball(s)) toward a cup on one of the 3000 holes. 5. At the same time, all the other players are hitting balls toward the green and the cup. (Player keep hitting their balls until they go in the cup.) 6. A specialist stands on the green picking up all the balls that land near the cup. 7. The specialist moves the green and the cup to the left or right -- usually gravitating toward where the most balls are. 8. When the specialist feels like it, they move the cup and puts the balls in the cup (the specialist can either put the player's balls or their own balls into the cup) 9. If many buy-balls are in play, the cup will usually (but not always) move to the left (higher price). 10. If many sell-balls are in play, the cup will usually (but not always) move to the right (lower price). 11. You can't see any of the other players or the specialist. A spotter (data service) tries to tell you the location of where some of the balls went into to cup, where the cup seems to be, and where some (but not all) of the balls are. Occasionally the spotter speaks slowly, is drunk or takes a nap. 12. To score, you must get BOTH a buy ball AND a sell ball into the moving cup. (If you play multiple balls at the same time, you only score when the balls get paired up in the cup) 13. To get a good score, you want to get your buy ball into the moving cup while the cup is on the right side (= low price side) of the fairway. 14. To get a good score, you want to get your sell ball into the moving cup, while the cup is on the left side (= high price side) of the fairway. 15. The score is the difference in positions between when you sunk the buy ball and the sell ball. 16. Surrounding the green are various hazards. These include the computer-crash hazard, the broker-is-down hazard, and the fast-market hazard. If one of your balls goes into the hazard, they may disappear, get stuck for several minutes, appear to be in the hole when they are not, or appear to be out of the hole when they are in. 17. ( rule 17 and its numerous subparts are hidden in the fine print of the NYSE constitution) 18. Occasionally the Securities and Golfing Committee (friends of the specialists that move the cup and get to play their own balls) will change the rules -- making balls more or less visible, restricting when you can play, or changing how the hole moves to the left and right. See, trading is just like golf, or NOT! See you on the fairways ...errr... order books, Traden4Alpha