The Car Driver and the Trader

There are a lot of similarities between a car driver and a trader. In fact, you, a growing trader, would learn a lot by imagining yourself to be a car driver. When you start driving a car for the first time, you are pretty much overwhelmed. There are so many controls in front of you and the sheer range of them throws you off guard and makes you wonder how you are going to master all of this so that you can drive your car with full control (so much for musing over those Jason Statham drifts, eh?).

The young trader feels the same. He has read through a lot of books and then sits in front of his trading platform to take his first trade, but then he is pretty much overwhelmed. The market is running up and down, his mind pushes him to take a specific trade, there is so much of news in the media which he needs to digest, there are indicators which push him to take a different trade and he is pretty much confused.

The young driver, pretty confused, starts settling down. He slowly and carefully maneuvers the wheel, pushes the accelerator, puts down the brakes and it slowly starts sinking in. But he still isn’t top of it yet. When he is thinking about the wheel, he forgets the accelerator and when he wants to speed up, he is actually pushing the brakes. The driver begins to feel frustrated on how the hell can he concentrate on all these things, all at the same time.

Cut to the young trader. His instincts tell him to go long on the Euro. He pushes the “buy” button. But then it goes all wrong and the trade ends in loss. Then he realizes that the indicators tell him to be on the sidelines and the fundamental news tells him to go short. He tries several trades but ends up losing almost every time and each time, he has ignored or forgot the things that he should have been doing to put on the perfect trade. The trader is at his wit’s end. He thinks…

‘How the hell can I digest all this information and put on the perfect trade each and every time?’

Back to the car driver. It all starts coming together. Practice, practice and more practice and then finally things start falling in place. Now he watches the road, pushes the accelerator, switches the gears with his legs on the clutch and he does all this at the same time, smoothly and without a thought and he is doing each of this.

The trader also reaches this level slowly. Practice and more practice for several months helps him sharpen his instincts and come up with a routine which helps him place the perfect trade. Now, his instincts, the indicators and the news are all in line, telling him the same thing. He checks his indicators, looks at the charts, reads news and then puts on the perfect trade, all in one smooth action without even realizing that he is doing all these things.

In this lies the lesson for traders. Like a car driver, the trader also needs to learn to put on good trades sub-consciously. Go through each and every aspect of his trading routine like a car driver, picking up information along the way, growing his instincts, all of which culminate in the placement of the perfect trade.

Practice. Lots of it.

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