Sunday, January 6, 2008

It's a Dance Not a Marriage

How about a dance? When the offer is accepted we join others on the dance floor and depending on the music, we twist, turn, step, skip, twirl, shimmy, and do what's necessary for our enjoyment and successful execution of the dance.

Dancing is individual and yet it's also a commitment to the partner we accept temporarily. It lasts maybe five minutes or so. It's a flirtation, a possibility but not a lifetime contract and we know it for when the music stops and dance is over we look for another partner for the next dance. Or at least some do; for some think that one "yes" means they got you as a partner for the entire evening if not a lifetime.

How about a trade? When the offer is accepted, we join others on the trading floor and depending on the momentum, we swing up or down, turn, elate, tremble as we watch the ticks and the charts and do what's necessary for the successful execution of the trade.

Trading is individual and yet it's also an investment in the company we chose temporarily. It may last a few seconds, several minutes, all day or even a few days but it's not a long term investment that some traders create by clinging to one despite the turning of the tides. Turning a trade into a marriage can be hazardous to your wealth.

Look again at both questions above and imagine yourself looking at a potential dance partner and a potential trade partner. Are you looking at your potential partner subjectively or objectively? In other words do you focus on the look, or the dance; the company or the trade? The best trades are when we remember it's only a dance; a temporary flirtation that, when executed perfectly, can be very rewarding.