A Trading Strategy Should Be Fluid Like Water

A Trading Strategy Should Be Fluid Like Water

Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot, it becomes the teapot. Now, water can flow or it can crash. Be water, my friend. ––Bruce Lee

Be Like Water…

The above quote is probably my favorite of Bruce Lee’s, and something I try to incorporate in daily life, especially when it comes to technical trading.

Well, I try to think with a holistic mindset. I believe wholeheartedly that in order to be successful in the Stock Market, you can’t just have the knowledge of the Stock Market, you need to do other things and read other things NOT related to the Stock Market.

In other words, I think that gathering other knowledge and practicing other skills, can transfer into one’s active trading and investing. And a key example is yoga and meditation, a practice that is very important in calming the mind and creating what I have dubbed a ‘clarity of mind’ in making key stock market decisions.

And like Bruce Lee said, be fluid like water, and one of the strategies I think is important when trading and investing in stocks is to be fluid, being able to change and adapt to the volatility of the stock market.

I think it’s this attitude and approach that has helped me to achieve a 90% success rate in buying and selling stocks.

The Only Thing Constant is Change…

My trading strategy has been changing over the course of several weeks.

I was focused on scalping and day trading, but recently I haven’t been day trading at all. And I’m more focused on swing and position trading.

1. With swing and position trading, it’s easier to make thousands of dollars profit, and not risk a possible thousands of shares on riskier stocks. You can trade stocks in the Dow Jones Industrial Average and the S&P 500. In other words, trade/invest in winning stocks. Take advantage of short-term surges.

2. A key advantage, if you trade a winning stock and it surges, you can take smaller profits as the stock goes up, and still retain the position and benefit on the percentage gains.

3. You scan for stocks that have a strong momentum and obvious uptrend, and hopefully you ride the trend until it starts to taper off or go sideways, then start taking in your profits.

4. You can buy more than one position of a stock to benefit from different trading strategies. In other words, you can have a long-term growth position, and another one that is specifically short-term to swing trade it. While the longer hold is a position trade.

5. You can cost average while focusing on one particular stock, buying shares every few weeks or every quarter, then simply selling positions when they reach your profit-taking goal.

The Art of Trading Without Trading

In essence, I try to be fluid, and try not to be so immersed into being an active trader or stock investor. But at the same time I try to feel The Zen of being immersed in the moment.

In other words, I try to remain a bit elusive and not call myself Joe-Trader, like they call Joe-Plumber or Joe-Accountant. I think this keeps me fluid and adaptable to the changing tides and volatility of the stock market.

And at the same time it’s important to show humility, staying humble, which keeps me disciplined and aware. Like in much of Eastern Philisophy, it’s important to lose one’s Ego, and that is how one also becomes better at what one does.

Image by tee2tee from Pixabay

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randomguru

Portfolio Manager & Musician

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