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If you want to know everything about the market, go to the beach

by , 28 January 2014

Ed Seykota, a trend trader who turned $5,000 into $15,000,000 over a 12 year time-period, says

“If you want to know everything about the market, go to the beach.”

If you understand this analogy about how the markets move like the waves in the ocean, you can be a successful trader and ride your profits up and gain tremendous wealth.

Let me explain…

Timon Rossolimos

Surfers know that waves will come, but have no idea when!

 

If you go the beach and look at the sea, you’ll know that different waves will come sooner or later.
But ask yourself…

Will they be big, small, and when will the next wave come?

You might guess it right fifty percent of the time, but I’ll tell you now.

It’s impossible for you to guess it right every time!

Well, the same goes with trading the markets…

You know the trends will eventually come, but you have no idea when!

Most traders try to predict when the market will trend and so they put in big bucks into their trades.

But majority of traders end up breaking their bank account.

The best thing you should do is follow the trend and don’t ask too many questions!

Anyone that says they can predict the market, especially the Forex market (which is a $5 trillion dollar a day industry), is lying to you or has some serious ego problems.

A surfer has good and bad surfing days!

An experienced surfer knows that when he goes out to sea, the majority of the waves will be small and petty.

He’ll try surf the small waves, but will fall off his board at times and risk minor injuries.

He also knows that eventually, he’ll catch that big wave that he’s been patiently waiting for.

This will make his surfing day worth the wait.

When that big one comes, he won’t predict when the wave will break but instead, he’ll ride it as long as he can.

This goes the same with trend traders!

Instead of riding the ocean waves, they ride their market trades!

The smart trader knows that in an unpredictable market, he’s going to have plenty of small losses and disappointments just like the surfer knows he’ll surf plenty of small and useless waves.

But when he catches the big trends, his profits will overshadow his small losses!

An experienced trader will also ride the trend as long as he can, so that he’ll make good profits for his portfolio.

Trends are like waves as they’ll trend in direction as long as they want to….

You don’t need to predict when the trend will turn but instead, ride with it and as long as it takes.

Experienced surfers don’t catch waves in rocky areas!

Finally, this is a matter of life or death for a surfer and financial freedom or failure for a trader!

Surfers go out looking of the biggest waves in the sea!

But sometimes the biggest waves are where there are enormous boulders and rocks near the sea bed!

They want to have fun but not so much that it could kill them!!

They choose the highest probability areas to surf where they’ll be safe.

Well majority of traders unfortunately “go big or go home” when they start out.

This is the very reason that majority end up losing everything!

When you trade, the trick is to find those high probability trades and at the same time, not risk too much of your portfolio.

Make sure, you never risk more than what you can afford to lose!

This is the absolute essence of trading longevity. 

Protect your portfolio as a surfer protects his life…

Sure, you’ll have a few minor injuries along the way, but you’ll always come out stronger and wealthier than you’ve ever imagined!

Ride the big profits and let the little losses slide and you’ll end up being a profitable surfer trader!

Always keep in mind,

“Wisdom Yields Wealth”
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Editors Note: If you'd like to boost your trading performance, success and learn more top insider tips and tricks Timon has learnt over the last decade then follow him on Twitter @timonr. 
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If you want to know everything about the market, go to the beach
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