COGNIZANT RAMBLINGS OF A TREND FOLLOWER ... :-)

WATERWORLD THY NAME !

I see the stock-market as a FLUID WORLD , FLOWING & EVER CHANGING....

7 Analogies between Markets & Water-ways :

1. Market is like a MAZE of cross-connected RIVERS , STREAMS & CANALS (some big , others small) & we are like travellers on BOATS that PLY across these water ways

(i) MAIN RIVER = Mother TREND (equivalent to LARGER DEGREE  TREND)

(ii) SIDE CHANNEL / STREAM = SUB WAVES or SMALLER DEGREE TRENDS within MOTHER TREND

2. Boat = Trading instrument (Shares, Futures , options etc)
(i) BIG BOAT = Shares / Delivery (stable, infinite time value, can always be made to FLOAT with MAIN RIVER TREND) ,

(ii) SMALL BOAT = F&O (time bound, RISKY, can be swayed away from MAIN RIVER TREND & get CAUGHT in side CHANNEL CURRENTS  i.e SMALLER DEGREE swings,
can float in MAIN RIVER , but can last only for that TRADING SERIES ,i.e till expiry)

3. Trader = Paid Traveller on BOAT
(doesnt always know DIRECTION OF CURRENT, or,
SIZE of the stream --> is he sailing on a  SIDE - channel or DOWN THE MAIN RIVER TREND ??)

4. BOAT TICKET COST  = Cost of Share / Futurz / Option ;-)

5. Low Tide = MONEY outflow / DERISK : High Tide = MONEY In-flow / RISK ON

6. LIFE JACKET: STOP LOSS - SL / TSL (helps u stay AFLOAT in case SHIP SINKS (SL) or LOCKS IN GAINS, in case u decide ur CURRENT BOAT is changing STREAMS & u JUMP SHIP (TSL) ... :-D

7. AIM of the Traveller = Stay AFLOAT, HOP & SKIP ACROSS BOATS & GRADUATE TO BIG BOAT ON MAIN RIVER
(in simple words , enter HIGH PROBABILITY TRADES, Book Profit & Multiply CAPITAL Wealth)

Now my dear FRIENDS,

May i request :

Pls co-relate these 7 ANALOGIES , and u guys VISUALISE / IMAGINE & tell me how best a TRADER  should ANALYSE & WORK OUT A HIGH PROBABILITY SET UP ,

to navigate successfully across all these RIVERS & SIDE CHANNELS , in ur choice of BOATS :-D

Wow... I love the markets :-)

cheers
SMO