Trading Philosophy

Discussion in 'Trading' started by alain, Aug 5, 2002.

  1. alain


    Very often in the past people have asked me: "how do the markets work? how does trading work? what is trading?"

    I came up with my philosophy of trading compared with a wave surfer. The surfer has to paddle out into the sea. Then he has to be patient sometimes very long to find a good wave. He will try to catch a good wave or a wave that he believes is good that will not be. So he has to make many attempts until he finds the wave to ride. When riding on the wave he controls his board. When getting closer to the coast he must to get off the wave before the wave smashes him against the rocks in the bay area.

    While trading I'm always trying to put myself into the position of a wave surfer trying to catch some of the masspsychology driven waves in the markets.

    By and by I started to read some books and websites about wave surfing and I was surprised how similar those two are. Below is a text I have found on the internet that I think is beautiful to read.


    "It's early. Very Early in the morning. For some reason, like fisherman, surfers feel that being up before the sun increases one's chances of success. It is as if by proving our dedication to the wave gods by arising abnormally early, we will be rewarded by these fickle deities with waves to surf.
    Rubbing our eyes in the cold morning, trying to manage the dexterity to attach the boards to the top of the car, we head off toward the beach, bleary, silent.

    Sometime just before the ocean comes into sight, our hearts quicken. Regardless of what the surf report said, we really don't know what the caprice of the wave gods will bear this morning. If the waves are small, bad, or unridable, which is at least half the time, our trip will have been in vain, but we will not be sorry for having made it. If the waves are good, large, and ridable, there will be danger, as there always is. So our hearts beat quickly in anticipation.

    When we arrive at the beach in the dawn chill, we change quickly, donning our tight rubber suits, becoming smooth like dolphins. We don't speak, looking intently at the incoming waves, calculating their size, looking for a channel in which to paddle out, being grateful for the waves. After ritually waxing our boards, we pad noiselessly over the cold, damp sand toward the ocean, the rush of blood in our ears combining with the pounding surf to make a deafening roar.

    Even through our wetsuits, the water is cold, taking a few seconds to seep inside to be warmed by our skin. Wading through the whitewater, we try to time getting on the boards so as not to be capsized. A big set of waves breaks, and we know that now is the time, Jumping on the boards and paddling furiously, we head toward the channel. If we are lucky, we will get past the breaking waves without a major spill. More likely, however, we will get slammed hard a few times before getting past the waves.

    Beyond the breaking waves there is an almost unnatural calm and silence. We sit on our boards, bobbing slowly up and down, looking out in the early morning sunshine for incoming waves, silently, expectantly. The waves come in sets, and between the sets, the calm is complete.

    Then it comes. A swelling, arching wall of water begins to form about ten metres away. By paddling furiously, we can find the part of the wave where we are no longer moving under our own power, but being propelled forward by the force of the ocean. Quickly, we jump to our feet and lean into the wave. As we look down the face of the wave, we see the sun reflecting like golden mercury, following as we move towards the shore in a rush of water. We manoeuvre the board in broad cuts up and down the wave, pulling the board over the wave at last, in frustration and triumph, knowing that there are still grater waves, but grateful for the wave just finished."
    (James D. Meacham 3rd)