What type of trader are you: Rabbit or Turtle?

what type of trader are you Rabbit or Turtle

Different Types of Traders: Exploring the Variety in the Financial Markets

 

Don’t be afraid to give your best to seemingly small jobs.  Every time you conquer one it makes you that much stronger.  If you do the little jobs well, the big ones will tend to take care of themselves…Dale Carnegie

Once upon a time, there was a rabbit named Reckless who was always boasting about how fast he could run.   He criticized all the other animals (especially the smaller ones)—saying that they were slower and lazier and could never beat him.  He was really rough on this one particular turtle (let’s call him Tenacious) and bullied him constantly.  Reckless said ugly, nasty words to Tenacious, who just sat there day after day and appeared to let the words roll off his shell.

But enough was enough.

Finally, Tenacious got really fed up with this.  He stuck his head out of his shell, looked up at Reckless and said, “Who do you think you are anyway?  Why are you always bragging about how you are “all that” and so fast that nobody can beat you?  I am sick and tired of hearing his abuse from you. “
Reckless smirked, looked down at Tenacious and squealed with laughter.   “Nobody can beat me.  Especially you—since you are slower than molasses.  Bring it on if you want to race because you don’t have a chance.  I will win, no matter how hard you try. “

“It’s on” said Tenacious, “we’ll race tomorrow at the crack of dawn. The next day came and Reckless and Tenacious showed up ready to go. The race course was all laid out and they both stood on the starting line.  Reckless was cocky and confident as he watched Tenacious move slowly along the path. Reckless had been up most of the night partying with the other rabbits, so he was sleep-deprived and decided to take a nap.

Choosing the Right Trading Style: Understanding the Various Types of Traders

Reckless woke from a fitful sleep and gazed around, looking for Tenacious. Slowly and steadily moving forward, Tenacious was about a third of the way to the finish line. Breathing a sigh of relief, Reckless decided he was hungry and had lots of time to eat. The heavy meal and the hot sun made his eyelids droop. With a glance at Tenacious– now halfway along the course– he decided to take another quick nap before running past the turtle to beat him to the finish line.

The nap turned into a longer sleep, and when Reckless woke up, the sun was beginning to set. Reckless jumped up in alarm and saw that Tenacious was now almost at the finish line. Reckless bolted as fast as he could, gasping for breath, leaping high into the air, giving it everything he had.  Too bad.  Too late. Tenacious beat Reckless.

 Lessons from Aesop: Slow and Steady Wins the Trading Race

This is my rendition of one of the stories from Aesop’s Fables, and the moral is:  Slow and steady does it all the time.

Many traders come to the markets to make huge profits by doing very little or getting rich quickly. They are like the Reckless rabbit who thinks he can win with the least amount of work possible.  They don’t understand that consistent market winning has to do with slow and steady gains.  The real secret of winning is to get rich slowly.  This is done by striking out (taking stops and small losses), hitting some singles and doubles (taking profits more significant profits on a regular basis), and occasionally hitting home runs.
Must Read: Market Timing Does it work

Trading Wisdom: Patience, Discipline, and Self-Reflection for Long-Term Success

So- what are a few trading lessons from Reckless and Tenacious?

(1) Overconfidence is a badge of ignorance. Unless you approach the markets with humility, you are doomed to failure. You might knock out a few good trades and get even more confident. You are an accident waiting to happen.

(2) Self-confidence is excellent but must be tempered with continual self-analysis and vigilance.

(3) While sitting back, resting on your laurels and bragging to yourself and others about your wins, another trader is out at the gym doing pushups and strength training. He/she is preparing to do battle with you. Stay solid and alert!

(4) You and you alone are responsible for your successes and losses.

(4) Learning to trade appropriately is a marathon, not a sprint.

(5) Never underestimate the value of patience.

(6) Take your setups and use them to maximal advantage.

(7) Chasing price is almost always a recipe for disaster and loss.

 

With ordinary talent and extraordinary perseverance, all things are attainable…Thomas Foxwell Buxton

 

Biography

Janice Dorn, M.D., PhD, received a PhD in Anatomy (Neuroanatomy) from the Albert Einstein College of Medicine in New York. She is certified by the American Board of Psychiatry and Neurology as well as the American Board of Addiction Medicine. Dr Janice Dorn has written over 1,000 articles on trading psychology and behavioural finance. Dr Dorn is dedicated to providing education and training about how the brain, psychology and emotions impact financial decision-making. Janice advocates for the elderly, a lifelong dancer and a pianist. Her website is:  www.mindmoneymarkets.com

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