TGIFF #013: What Surfers Can Teach You About Trading...

Living in Australia essentially means I live on a huge island.

Needless to say, travel in any direction long enough and you’re going to hit the coastline. 

We are fortunate to be able to enjoy spectacular beaches and world-renowned surfing destinations.

Surfing underpins a way of life for over 2.5 million Australians.

On any given day there will be people out surfing and generally they fall into two groups. 

The first group are the grommets; the term grommet was originally a term to describe inexperienced young surfers, the newbies if you like. These surfers normally surf closer to the shoreline and catch smaller waves.

When you watch them, they are almost frantic, they are young balls of energy, catching every wave that comes along. 

They have lots of hits and misses. They get on a wave, they fall off - then repeat, over and over again. 

Why?

2 reasons, the first is it's fun and secondly, they are developing their skills as young surfers.

Then you have the second group, these are the surfers "out the back".

Unlike the grommets (depending on conditions) they spend most of their time sitting on their boards waiting. 

Most of the time they aren't doing much at all, they can spend what seems to be a long time just waiting for the opportune time to catch a wave. 

This demonstrates experience, they know if they wait long enough the perfect ride will come.

These surfers will catch far less waves than the grommets, but when they do it results in a much longer/sweeter ride. 

They only need a few great rides to have had a great day’s surfing, because they are getting quality rides as opposed to lots of low-quality rides.

WHAT DOES THIS HAVE TO DO WITH TRADING?

The surfers out the back are great role models when it comes to trading. 

Think about it, these surfers have patience, lots of it. They know their opportunity will come and they are prepared to wait for it. 

They are not interested in little, short rides, they are in it for the main game - nice fat juicy waves. 

They know the thrill of a long ride is WAY better than lots of frantic activity.

Sure, they will have misses, they will miss waves, but when they get on one it sustains their surfing fix.

They don't worry about missing a wave, they know another opportunity will come along, they have learnt that patience pays off.

It’s the same with trading, you need to be like the surfers "out the back". 

We must be patient and develop a mindset that we do not need to be frantic with our trading (over trading), rather we are patient because we know the opportunity will present itself and when it does, we ride it all the way. 

Sure, we may have a few losses, but we remain patient and disciplined knowing the great ride will come.

Like the surfers we are going to be sitting on our boards doing nothing most of the time, we don't want to try and catch every single shore break. 

We are going to WAIT it out. When it comes to trading less activity = more profit. 

Now I know what you’re thinking, that just doesn't make sense. How can it possibly be that by doing less I make more money? 

Well think about this, all we ever do as traders is deal in probabilities there are no certainties.

It is much more lucrative to wait for a high-quality setup that has a high probability of success, rather than looking at your screen all day chasing low quality setups. 

When the high probability setup presents itself, you will know, they are obvious. 

The simple fact is high quality setups with a high probability of success don't come along that often. 

This is where your patience is critical.

If you can adopt a mindset of patience and discipline, you will have mastered two of the MAJOR hurdles every trader has faced.

FACT: If you are not patient, you will perish...

As humans we have an innate need to be doing something - this is particularly tempting when it comes to trading the forex market. 

The market offers you an unlimited number of opportunities 24 hours a day to make money, it also offers you the same number of opportunities to lose money. 

New traders tend to forget this, and they get "sucked" into the allure of making money. 

They feel they need to be doing something, after all if you’re not in the market you’re not making money right.

I'm here to tell you - if you’re NOT in the market you are NOT losing money.

The very best traders in the world know this, they have developed an innate ability to be patient. 

Legendary trader - Jess Livermore, summed it up perfectly.

"Patience is the key to success, not speed. Time is a cunning trader’s best friend if he uses it right"

Longevity is critical as a trader; we need to conserve our money for the trades that have the highest probability of success. 

One way of doing this is by developing patience. Remember this:

IF YOU’RE IN THE MARKET MORE THAN YOU ARE OUT - YOU ARE TRADING TO MUCH...Absolutely drill that into your brain. 

Because if you don't, as sure as the sun comes up tomorrow, over trading will send you broke quicker than you ever thought possible.

So, the takeaway is be like the surfers "out the back" - have patience. Patience combined with discipline, a proven trading edge and a methodical approach to trading will ensure your trading will be as stress free and lucrative as possible. 

Happy Surfing.

Hope these tactical trading analogies are helping you sail your forex boat swiftly.

I’ll see you next Friday.

Till then, keep trading and have a wonderful weekend!

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