Thursday, August 16, 2012

The Daily Note - Traders as Drivers & Riders*

*****Which one are you? Have you noticed that when you drive, you remember the way better than when you are a passenger? When driving, we get a better feel for the road, when we are passengers we tend to see the scenery of the driver's choosing but cannot necessarily retrace the route we were on.

What we remember depends on how we approach the route; one as driver the other as rider. (no backseat talk here)

Every time we hit our desk for a trading day with the attitude that we are just one person and we have no say or influence over what goes on in the world, we basically take on the role of a rider. Therefore the trade we choose to enter is under someone else's control, and we may not know the destination. We view the scenery, worry about the speed try to give directions and hope to get to our reward. Hmm not very confident is it? It's like you have the gas pedal and someone else you don't know has the wheel. No wonder there are crashes. The reward is that we get to cheer or blame the driver for the outcome.

On the other hand if we hit our desk with an attitude that we are responsible for ourselves and what we do makes a difference in the world and in our lives, we become drivers. Therefore when we choose to enter a trade we know we are in control of the direction, timing, entry, and exit. When we are drivers we have total control of the pedals and wheel and tend to steer ourselves toward a destination. We stop and go and make corrections as we need to and know that our choices make a difference in the outcome. The reward is that we have to take credit for the outcome, be it positive or negative.

In other words, every time we play the rider we allow someone else the steer our way; but when we play the driver we make the choices of our way. Both can be scary and both can be rewarding. We make the decision as to which we wish to be at any given moment of our lives and knowing which we prefer is one of the steps toward developing our trading strategy. So, look yourself in the mirror after a trading day and see which one you chose for that day, then analyze your trades accordingly. You may be surprised at what you discover about your style.

Maybe you're more a rider as you start your day and become a driver as you gain more confidence. Maybe you, like me, prefer to take the wheel right away. Maybe you do one or the other depending on your mood or the day. Regardless of which you are, knowing your tendencies will help you in the trades you take or make and the next time you sit ready for a trading day to begin, you can clearly decide which you wish to be.

Riders On The Storm by Creed on Grooveshark

Happy Trading, Living and Dancing

*Some content originally published on 11/16/2007 under title "Drivers & Riders"

The Daily Pick - $DJIA

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