Trade The Journey

Trade The Journey

It’s Macho Time!

Top of the Morning! Some readers may be too young to remember Hector “Macho” Camacho, but I do. I was a bit too young to see his fights. What I do remember is his charisma and personality. “It’s Macho Time“, he would chant as he made his way to the ring.

He had speed, power, ring smarts, and charisma. Few fighters have the last trait, charisma, which sells the pay-per-view and allows the fighter to demand top dollars.

A documentary featuring Hector’s family and friends aired yesterday on his life in and outside the ring. A couple of years back, he was killed in Puerto Rico during a drive-by shooting.

Boxing is my favorite sport to watch. It’s one of the few sports where the winner is settled in the ring without outside interferences-the sweet science of boxing, the art of hitting without getting hit.

What I like most about boxing is watching fighters train. When I watch the shows covering fight camps, I marvel at the discipline a fighter must-have. During these camps, Fighters maintain a strict diet, self-isolate, and workout multiple times a day to prepare for the fight. To arrive at the fight in peak condition is every fighter’s goal.

Macho Camacho had it all, but his greatest enemy wasn’t in the ring; it was within.

The top fighters coast through the competition at the lower levels and usually receive their first challenge after a few notable wins. Finally, the fighter has arrived, and with the new recognition comes a new level of opponents.

These new opponents are as skilled and intelligent as you are. Now, the question is who will impose their will on the other and come out victorious. Who has the will to survive the closing rounds when the fight is close and the fighters evenly matched?

Trading is a full-contact sport similar to boxing but not quite. Of course, there are no repeated blows to the head or referee to stop the punishment.

In trading, you’re allowed to receive as much punishment as you can take. You can even borrow additional finances to increase the punishment and dig a deeper hole.

Boxing is different in another way; its barrier to entry is high. It’s almost impossible for anyone to enter the ring without the experience or skill level to compete. In trading, anyone can enter the market as long as they have the funds to do so.

The more professional traders mimic the experienced fighter who has become a disciple of the sport. The experienced fighter is a disciple of discipline, repetition, and ringmanship, knowing that the edge is found through concentrated time and effort.

Sometimes, I study charts, not for a purpose but to hone my skills in objective observation. Once you open a position, your perspective on the trade is likely to change. Even your best efforts won’t prevent you from human nature.

This is why repetition is so important to the professional trader. This trade, just like the first punch thrown, isn’t to knock you out but to assess the situation. I’m evaluating several things upon entering a position.

I’m watching the market to get a feel of its movement. I’m assessing the competition on the other side of the trade and their reaction to the movement. Finally, I’m evaluating my thinking and responses to the market.

Like a boxing match, the strategy is dynamic because my opponents are always adjusting.

“Everyone has a plan until they get hit.”

Mike Tyson

The more experienced I become, the more I value the psychological skills involved in trading. After you learn the patterns and strategies, and your skill level increases, the fight turns inward.

Not only are your opponents skilled, but they are also well-capitalized. Traders of this type are disciples of the market.  These traders are continually working and evaluating their trades, looking for the small nuances holding their business back.

Like the fighter focusing on his next opponent, you, as a trader, must focus and concentrate on the next trade. When the trade is on, you have to be ready to make adjustments and recognize your opponent’s moves.

After the trade is complete, you have to be willing to accept the results and lessons provided. You have to move on to the next trade without carrying the effects of the results with you. Trading is a sport in which the majority of traders do not come out victorious.

The great traders and boxers do have one glaring similarity: their eagerness to focus on risk management.

In boxing, the ultimate goal is to hit and not get hit it. In trading, the art of keeping your capital reigns supreme. You can’t trade without capital.

I decided to write this post likening trading to boxing because the excitement still lingers from the Errol Spence and Danny Garcia fight. Errol Spence is one of my favorite fighters. Danny is a good fighter with a slick Philly boxing style.

It was a good fight, but Errol Spence was too much for Danny and overwhelmed him. Danny is a counter puncher, and unfortunately, I think he waited too much instead of pressuring Errol.

Hopefully, this victory will help set in motion a fight between Errol Spence and Bud Crawford.

This post may not cover some of the usual topics I write about but it does shine a light on the work ethic needed to become a successful trader. The top boxers are well-disciplined, experienced, and mentally tough having weathered the onslaughts of top competitors.

They are masters of their craft. These are the qualities I aspire to have as a master trader. I want my work and training to become my meditation.

This past week:

I have maintained the habit of eating out once a week. I can now go days without having an urge to spend money on something. The feeling still arises from time to time but I have developed some tactics to avoid following through on my urge to spend.

Some time I refocus my mind on another subject. Other times, I’m able to just say “No”. A few times I may give in and make the purchases. The circumstances are dynamic, so I have to continue to develop the mental strength to maintain my position of saving first, and spending last.

My grade for the previous week is a “C” for steady improvement.

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