The Maiden Post: The "Feel"

Let me first start off by telling you about myself. I am Henry Chen and I still have a lot to learn about trading. I have been trading the US equity markets for close to 2 years. But even if I were to be a 15 year veteran, there will always be new occurrences in the market, and thus, new opportunities to learn.

I am not a fundamental trader, I cannot predict future trends in certain sectors; I leave that up to the great minds in institutional funds. I am a trend follower, someone who "rides the bucking bronco," as deftly said by Bill Dunn.

So why should anyone read anything written by someone who isn't a market veteran? Because I do not feel that there are enough blogs out there to address those who want to be traders but are not in the line of work already. I went into trading as a curious, but naive individual without a clue as to what it really entailed. I wish to inform those who are interested in this field what challenges lie ahead of them and what I have done to overcome them. However, because I mostly will be discussing the mental aspect of the game, a challenge all types of traders face, anyone and everyone can benefit from reading this blog.

But enough about me, I want to talk about the popular conception that some people are just born to be traders, that some just have this "feel" about the market. It is true that there are those who have a fine-tuned sense on what they see on their screen. But this comes through experience, through observing and participating in the market countless times. This is not an issue a newbie should worry him/herself over. Think about this, would it make sense for someone who hasn't swung a baseball bat, worry about whether he can hit home runs?

My friends, who are not traders, bring this issue up more frequently than I care to address. My response is the same everytime: Do not worry about it. "Feel" is a reaction, subconscious or not, that a very experienced trader has to what the market is showing them. This can only be acquired through experiencing various situations and patterns over and over again, like going to the batting cage to perfect one's swing. Even so, how many traders have this ability anyway? I can certainly tell you that the "regular" traders vastly outnumber the "feel" traders. So, there is no reason to even think about this issue in trading. If you have it, you will know down the road. If you don't, join the rest of us!

When you start out, there are so many aspects of the game you have to wrap your mind around, it can be overwhelming. From bids and offers to defining risk and from setting your stop-loss to mentally preparing for the inevitable losses, it is important to prioritize what you want to work on. Worrying about an issue that you cannot control at that point in time will needlessly waste your mental capacity during a crucial time in your career. It is widely known statistic that close to 90% fail or quit becoming traders. And the easiest prey for the sharks in the water are the newborns wading in the water, unable to swim by themselves yet. So do yourself and me a favor and concentrate on what you can control.

Feel free to post comments, I will respond and appreciate every one (reminiscences from experienced traders very welcome as well).  Also, if you would like me to discuss a certain topic in my next post, post it in the comment section as well. Until then, never leave home without a stop-loss.