Learning to Draw

Life’s about reaching out.

There’s not a single bridge that’s been built without someone having to reach out first.

A child connects the dots of life to find that it’s looking at a roadmap. Walking on a known parameter is then easy. One knows where to tread.

Mrs. Market is a conceited lady.

She needs you to reach out to her.

Till you don’t, she doesn’t care about your existence either.

When you do, she starts concerning herself with you, but only after you make the first move towards her.

You have to take the first step. You have to build the bridge.

In the world of trading, you do that by putting on a trade.

Given that you don’t want to lose your pants to a tough cookie like Mrs. M, you need to first look at the stuff that’s working in your favour. Before reaching out, that is.

You are able to connect to her with hardware. As long as the hardware functions, there are no further issues there.

The approach with which you connect is your strategy. It has been developed upon observing the behaviour of Mrs. M, and as her behaviour has changed from time to time, so has your strategy reinvented itself in tandem. The software with which you programme your strategy has highly maneuverable algorithms that are able to alert you instantly upon any of Mrs. M’s behavioural changes. Once you’ve identified her pace and style of movement, you know what kind of a bridge you need, to connect with. You know what kind of a trade you need to put on.

Putting on the proper trade at the proper time is the name of the game. When Mrs. M is trending, your trade time-frame, trade-size and stop are all different from when she is moving in a range. When she is falling, the pace of your trade needs to be fast, real fast. Your instrument needs to be options, not pure equity, since the latter is tougher to move through. When she is flat, take a break, don’t build any more bridges for a while.

Each bridge, that you are capable of building, should give you an edge over Mrs. M. If that’s not the case, then the bridge is faulty, for even a coin-flip is giving you an even-steven 50:50 shot at Mrs. M. Therefore, your bridges need to be in the 60:40 plus category. Bridges take time and effort to build. Thus, they must yield you ample profit once they have been built.

After a while, she gets bored with your approach, and changes her pattern. Your bridge is not able to connect well. You notice this when your trades start going awry. Your systems need to adapt, and new bridges need to be built to account for her new avatar.

And what is this whole exercise?

Just like the child who connects the dots, you are learning to draw at Mrs. M.

And you’re doing it well.

You’re drawing at her with systems that give you a good edge as long as they work. When they falter, you tweak them to adapt to her, so that they continue to allow you to draw at her with an edge.

You don’t draw at Mrs. M without an edge. Period.

If you can learn this one basic fact, you’ve learnt a lot.


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