While waiting to check in a hotel in Tromso, Norway, I would like to do a short post against something that I ponder during the journey. I believe those who have been in the trading/investing business for long should understand the concept of letting profit run and cutting losses fast (extremely important for short term trader but not too crucial for long term value investor). However in reality, not many trader/investor can fully execute this concept seamlessly, mainly due to the human pyscholoygy of risk seeking when the odd is against us and risk adversing when we are in the domain of gains.
Interestingly, there are still traders/investors who can execute this successfully. This lead me to look at this phenomena in different angle. As an avid reader, I do have immense interest in Chinese Metaphysic. In the study of metaphysic, we aware that every individual has their own path to success. Some people can be very successful in short term trading while some are more suitable to do long term investment. Some are very comfortable to cut losses swiftly without much ‘pain’ but some just can’t do it in style. While education and continuously learning to become a successful trader/investor is crucial, we still need to find a way which we can feel very comfortable to trade/invest.
By understanding ourselves through metaphysic, we are sort of de-coding our DNA in learning ourselves in-depth in order to select the least resistance path to en-route a trading/investing success. We will avoid pushing or forcing ourselves to follow a set of rules which may lead us to success but would also strain us throughout the journey. All roads lead to Rome, let’s pick the most comfortable way to reach Rome in style!
The good news to us is that regardless we are short term/long term, aggressive or converative trader/investor, options is versatile to suit all circumstances of our trading/investing journey!