A professional fisherman has much in common with a professional trader. They both must learn their craft to the point of mastery and doing so develops a refined ability to ‘feel’ the sea or the market. There’s much you can learn from a professional fisherman that will help you improve your trading…
The example of a highly-skilled yet sickeningly patient fisherman out-fishing all his competitors is a very good metaphor that we can use to help you better understand what it takes to become a professional trader. Both professions require many of the same attributes such as; an insatiable desire to master the craft, continuously learning and expanding one’s knowledge and skill, the desire to do whatever it takes to win, and more. All of the aforementioned attributes require intense passion, discipline and patience; things that those who never go pro simply do not have, at least not at the necessary levels.
Let’s dive into this in more detail…
Read the market like a fisherman reads the water…
The first thing you need to learn from successful fishermen to apply to your trading, is that you need to read the market like a fisherman reads the water conditions. As I alluded to above, a fisherman will consider many variables BEFORE they cast their line into the water, because they know that to not do it will essentially mean they are shooting in the dark, so to speak.
As discussed in an article by Discover Boating:
Experienced anglers will even tell you that when to fish can also be affected by where to fish. Too many hot days during the summer can adversely affect fishing in shallow lakes, ponds, and rivers since higher water temperatures can reduce oxygen in the water and cause fish to become sluggish.
Commercial and recreational fishermen use their extensive knowledge of both when and where to fish to significantly improve their catches. These fishermen take various factors into account, including but not limited to; predicting tides as well as understanding tidal currents, how much sunlight an area of water has received recently, warming or cooling trends, the depth at which fish are found, storm and weather patterns, wind and tidal flows when saltwater fishing. In some areas, strong tidal currents will concentrate bait and small fish, which attracts larger fish. As you can see, there is a multitude of variables that go into professional fishing operations, much more than the average person thinks.
As a trader, you need to understand how to read the market just as a fisherman reads the water. You must understand the market’s ebb and flow before you go ‘casting your bait’ or your money into the market. It’s important that you study the market and read it like you would a book; you should know what happened on the previous page to understand the current page. So, get intimate with a market and really learn it’s idiosyncrasies and become a master of it, just as a fisherman is a master of reading and understanding the different variables that affect water conditions to attract fish.
Professional fishermen are ‘snipers’…
Professional fishermen behave very much like a sniper in the military, a concept I have discussed in a past article here. A pro fisherman doesn’t move around constantly because they would cost more fuel, time and labor preparing rigs each time they move, and of course more bait. They are seasoned professionals who strategically plan where to fish, reading the ocean and weather as discussed above, to give them an edge.
How many times have you heard me talking about your trading edge in my articles? Well, there’s good reason for it. Just as a fisherman needs an edge or a strategy to catch fish, so you need an edge in the market. Your edge is what puts the odds of trading success in your favor, and it requires you to be educated and prepared, just as a professional fisherman is.
Does a professional fisherman just wake up and run out to his boat and zoom off to the middle of a lake or ocean and cast his line into the water? No. Of course, now, and you know he doesn’t. So, when looking at it from this perspective, how silly does it seem for you to go open your charts up and just enter a trade for basically no reason? Very silly indeed.
Just as a fisherman plans when and where to fish for the best possible haul, you need to plan how you will trade; what your trading edge is, how you will manage your risk and your exits as well as yourself! You must do this BEFORE you enter the market if you want to give yourself the best possible chance of trading success.
Patience is key in fishing and trading…
If you’ve ever gone fishing, you know it requires a lot of patience. However, unlike trading, you are basically forced to be patient in fishing. IN trading, you can just set up a trade up and enter it for no reason other than you want to risk some money, this will of course destroy your trading account but you can do it if you want to.
A successful fisherman will remain in his pre-planned high-probability fishing spot for as long as he deems necessary. He will not give up after 20 minutes with on bites, he will persist and wait patiently, perhaps re-casting, but not moving areas frequently. Similarly, as a trader you may have to wait days or even weeks for a high-probability trade setup to come along, before you should put your bait or money into the ‘water’ to try and catch a big move in the market.
Patience is truly what separates successful traders from the masses of ‘sheep’ who lose their money.
You need the mindset of a winner
As discussed in an article on Bassmaster.com:
Another thing that winners have — and this might be the most important trait they carry — is the ability to put their mistakes and shortcomings out of the picture. They don’t blame anyone or anything for their mistakes or problems. They never make excuses, and they don’t forget. They just move forward.
It’s like they can flip a toggle switch in their mind that allows them to turn those bad days into a non-issue. The past is just that, nothing more. It has no effect on the future. The next cast is a new opportunity and so is the next day. They don’t say they’ll make a clean break. They make a clean break.
Now, the above quote is obviously discussing the mindset needed to win at professional bass fishing. But, this is basically the same mindset you need to win at professional trading. You have to move forward and not dwell on bad days, or losing trades. You are going to have losing trades, but if you let them stew in your mind and take over your thinking, you will end up losing even more money as a result.
Just as a fisherman has to accept bad days with little or no good catches are part of his gig, so you have to accept that there will be many slow days in trading where there either are no good trades to take or you get a loss instead of a winner. How you handle these situations and if you can move forward without being bogged down by them, will significantly influence your long-term trading results.
If you’re out fishing and you immediately dump all your bait into the water once you get out on your boat, how are you going to catch the big prize fish? Well, you aren’t, of course! When you’re trading, if you immediately go and risk way too much, and lose a large portion of your risk capital, how are you going to stick around long enough to catch some big trades? You won’t! A fisherman needs to manage his bait properly just like a professional trader manages his bankroll properly. You must not over-trade or over-leverage just like you must not waste your bait if you’re a pro fishermen.
A good fisherman is nothing if not prepared. He must learn to cast his line in the right places, first and foremost. Eventually, being well-prepared and well-educated on all the various variables of fishing, will result in developing successful fishing skills that put a fisherman into the upper-echelon of fishing professionals. Ultimately, what this does is develop a gut feel for fishing; a sort of ‘sixth sense’ that allows these fishermen to instantly recognize where and when to fish. Similarly, after learning how to trade and putting that knowledge to practice, you will develop deep trading skill that ultimately results in a refined gut trading feel that will put you in the top 10% of traders who are successful.
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