Leaking Faucets and Trading

Leaking Faucets and Trading

Leaking Faucets and Trading

This is a Guest Post by: Colibri Trader @priceinaction. This article is used here with permission and originally appeared here on ColibriTrader.comDrop by drop the river is formed.

This morning I realized that the kitchen faucet is leaking. Have you ever experienced one of those moments when something small from your daily lives brings memories or helps you come up with a new idea or visions?

Have you ever thought of how close the elements of life are to trading?

This morning I was mesmerized when I realized how similar leaking faucets and profitable trading are.

 Read on…

Rain falling on to a virgin landscape eventually organizes itself into streams and eventually a river. After a river is formed, it goes to the sea.

In a very similar way, trading ideas can sometimes organize themselves into an outcome. Sometimes, two “rivers” form and there is a double outcome. Traders then need to choose between the two.

But which one is the right one?  We, as traders, do very seldom ask ourselves those questions. Impatient, greedy, fearful and willing to get rich quick are all terms defining the average trader… the losing trader.

 The faucet keeps on leaking…

Trading may have more than one outcome.

In one-stage trading we go from a field of possibilities to a single outcome.

In two-stage trading, we go from a pool of possibilities to a few alternatives and then possibly to a couple of outcomes.

In three-stage trading, we might first build our own trading theory, then discover a pool of possibilities and then choose from a few alternatives.

There is no such need to categorize so many outcomes and alternatives, as long as you realize that you can’t go straight to the right outcome. You cannot be a profitable trader by just looking for the “right answer”.

Traders often aim at reaching a single conclusion, but they forget that what makes a trader profitable is the process of trying to extract maximum value from both sides of any contradiction and not a blindfolded coin toss.

It is the process…

And so, the faucet keeps on leaking…

And so, profitable trading takes time to form a “river”.

Then the student of the markets think… if only I could have the persistence of a leaking faucet.

Drop by drop…


Check out my article on How to Trade with Renko

This was a guest post by: Colibri Trader.