Saturday, January 22, 2011

The Market and You is like the Sea and You

Your relation to the market is like you and the sea. The sea does not know of you existence. The sea has no interest in your welfare. With the right tools and skills, you can go out and make a living from the sea. You can study the behavior of the sea. With that knowledge, you can avoid the danger and survive. With the knowledge and skill you can find fishes and make a living from that. You can even become rich. However, there are dangers in the sea. The sea may drown you if you don't read the danger signs or when you take too much risk. For example, if you only have a small boat, you can only go fishing in extremely calm water. However, if you boat is bigger, you can afford to take a bigger risk and fish in more choppy water. With smaller boat, you can only fish along the coast where there might not be much of big fishes.

Trading is like that. You need to build your capital to be able to take a bigger risk. If you capital is small, you better off taking lower risk or you will be wipe out very fast. The market does not know your existence. It does not care if you exist. It does care if you make tonnes of money or if you go broke. It just kept moving on. You can cry over your loses or celebrate your winnings. It does not matter to the market. Traders come and go. Investors come and go. Market continues.

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I'd like to share my experiences and knowledge about healthy and happy living as well as mid-life crisis. 不以物喜,不以己悲。