Dancing With A Gorilla for Better Trades
Below is a MRR and PLR article in category Finance -> subcategory Investing.
Dancing With a Gorilla for Better Trades
Summary
Just like a lighthouse, the market sends signals, and it’s crucial for us to listen and adapt. In a clash, the market always prevails.Article
Consider the following story as an allegory for trading, not a political statement. It’s said to be a genuine radio exchange between a U.S. naval ship and Canadian authorities off Newfoundland in October 1995. The conversation, reportedly released by the chief of naval operations, went like this:
Canadians: Please divert your course 15 degrees south to avoid a collision.
Americans: Negative. Recommend you divert your course 15 degrees north to avoid a collision.
Canadians: No, sir. You must divert your course 15 degrees south.
Americans: This is the captain of a U.S. Navy ship. Divert YOUR course.
Canadians: We repeat, divert YOUR course.
Americans: This is the aircraft carrier USS Lincoln, the second-largest ship in the U.S. Atlantic Fleet, accompanied by three destroyers, three cruisers, and numerous support vessels. I demand you change your course 15 degrees north, or countermeasures will be taken.
Canadians: Captain, this is a lighthouse. Your call.
Just as the lighthouse stands firm, the market sends out signals that traders need to heed. The market, like the lighthouse, will always prevail.
Market Wisdom
Two key principles in trading are:
1. "The stock will never listen to you, but it will speak to you if you learn to listen."
2. "If you dance with a gorilla, don't try to lead."
Listening to the market (interpreting charts and news) and adapting is vital. While we may anticipate a market upswing, history shows that these movements often reverse. Successful trading is not about holding a position and hoping. It requires dynamic and tactical skills.
As one saying goes, "The learners will inherit the earth, while the learned will find themselves suited for a reality that no longer exists."
Workshop Insights
We recently completed filming new materials in Phoenix and held a “Two Days of Tradin’” boot camp in Denver. Both were rewarding experiences.
The first day introduced a course called Power Spreads, which demonstrates how to use spreads to minimize risk and neutralize volatility. We explored option pricing and volatility through the X-Factor options graphing tool, using historical trades of QLGC and IBM. Participants learned how appearances can be deceiving in trading choices.
On the second day, we recorded "Market 'Mind' Fields." This session was insightful, revealing mental hurdles in trading and strategies to overcome them. Nearly everyone battles these mental "land mines" in trading, and addressing them is crucial for success.
In Denver, the "Two Days of Tradin’" boot camp attracted a great group, mostly locals and women. We tackled bracket trading and practiced going long and short. On the second day, options were added to the mix. Using the X-Factor Options Graph, we analyzed various strategies and saw firsthand how different strike prices and expiration months affect profits. Participants realized that option trading is complex, with the potential for different strategies to yield varying results even in the same market conditions.
Upcoming Opportunities
New classes are scheduled from March through May. These trading simulator workshops are invaluable. Consider joining our web workshops or attending a "Two Day Trading" camp to refine your skills.
Join us at Better Trades, where learning never stops.
Ryan with Better Trades
You can find the original non-AI version of this article here: Dancing With A Gorilla for Better Trades.
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