Here’s a history lesson on why traders need to constantly align themselves with the dominant trend, and have a plan for adapting to whatever may arise. Life lessons are often trading lessons, and vice versa.
Timing and Planning Are Key In Life and Trading
During the 1780′s Joseph Fouche traveled from town to town teaching mathematics, but he knew it was not his calling. He needed some event to make his mark on the world—and that event came in 1789 when the French Revolution broke out. He befriended revolutionary Robespierre and proceeded to rise in the rebel ranks. Yet he always knew he needed to be the proper side of the swaying political dynamic, lest he literally lose his head.
Over and over again Fouche cunningly switched sides, including getting appointed chief of police and then “sleeping” through a coup by Napoleon in 1799. By not threatening Napoleon or intervening, Fouche was able to keep his post and became close with the new leader. As Napoleon fell, Fouche lay low, and once again watched what happened around him, waiting for what side he would align himself with. When Napoleon returned Fouche was reinstated.
Like a cat with nine lives, as Napoleon’s rule once again came to an end Fouche was able to retain his post. Being a highly ranked individual, having escaped the fate (beheadings) of many others in his position, by now no one even dared challenge him.
Joseph Fouche’s timing was impeccable. The full story is remarkable as this is the briefest of recaps. He continually put himself on the side of whom he thought would have power, not just for the day but for months and years out–and he planned accordingly. When times were uncertain he lay low, attracting little attention and knowing that his time for prominence would come again.
The Trading Lesson
Timing in trading is everything. You can be on the right side, but if you are too early or too late, it is all for not. Focus on your timing, hone your patience, control your emotions, monitor your surroundings closely, and only act/react when your plan tells you to.
Be cunning. Don’t try to be a hero, but rather allow yourself to profit from the climate of the day. Do not become tied to one side of the market, for the market is fickle and will not respect your loyalty. Lay low in times of uncertainty, and step out of the shadows only when it appears one side has upper hand (trend) – align yourself with the strongest, and profit accordingly. When not to trade is as important is when you trade.
By Cory Mitchell, CMT
You May Also Like:
What Hitchcock teaches us about stock trading – Hitchcock left nothing to chance, here are his lessons to traders.
Use the “mirror effect” in unpredictable markets – Mythology (and martial arts) teach through the story of Medusa that when you are uncertain about what to do, mirror the movements of your adversary.
History Teaches Us to Trade Patiently – 17th century Ming Painter Chou Young teaches just how important being patient is; if we aren’t patient with trades we will likely end up worse than be began.
In Trading Plan to the End – The story of the Prussian premier Otto von Bismarck, and how we executed his plan perfectly from the beginning and stopped when he reached his goal–a skill few people have, other they keep pushing onward failing to make a new plan.