Living on a Prayer and Preying for a Living: The difference between the Gambler and the Strategic Trader
What is your trading style - are you a Gambler or a Strategic
Trader? Do you live on a prayer, or do you prey for a living? Let’s
examine the two.
The Gambler is someone who will take a shot in the dark, and pray that when he turns the lights on, the arrow has hit the target. Now why was the Gambler willing to take a risk on any particular stock? It could have been various reasons – intuition, a solid analyst report, a tip. But essentially, the choice is not because of any kind of calculation or risk/reward process – just a blind leap of faith. If the gamble pays off, this kind of trader is lauded as a maverick, if it doesn’t – well, you always knew him to be a Gambler, didn’t you?
By having no set process, no fixed aim, and no exit strategy, the Gambler is essentially living on a prayer. If the markets go up, he is happy, and, when the markets go down, he is anxious, perhaps mutters several more prayers under his breath. Far enough down this path, the Gambler is someone who is completely driven by emotion. He buys into Fear and sells into Greed and Euphoria.
Now what about the Strategic Trader? Strategic trading is essentially the opposite of gambling. The key characteristic of Strategic Traders is that they are skilled hunters – they are steadfast not only on their prey, but on developing processes by which to effectively hit their target. Strategic Traders ruthlessly assesses the risks and rewards of any stock, by studying it closely, and putting probability on his side. Like any good hunter, they are watchful of the patterns and movements of the stock – if the prey moves left or right, the hunter jumps quickly in the same direction.
In this sense they are completely unemotional, essentially the opposite of the Gambler. Think of the Strategic Trader as the eagle that soars above miles above head, eyes pierced for the slightest movement of its prey. The Strategic Trader, like that master hunter, knows when to let keep gliding, when to swoop down, and when to swoop up. There is no joy or fear for the soaring eagle – just a complete reliance on its unyielding vision. The eagle isn’t taking a gamble, it is taking a sure shot.
Which would you rather be? A Gambler or a Strategic Trader? Do you want to Live on a Prayer, or Prey for a Living?
About Author
Dr. SREEKUMAR RAVINDRAN
Founder and Chief Managing Director at Tradonomix
Dr. Sreekumar Ravindran, known as Saint in trading forums such as Trader Saint Forum & Traderji, is the visionary and mind behind Tradonomix. He is a passionate trader himself and has spent over 15 years in researching and accumulating knowledge of trading and applying the same in real-time.
Dr. Sreekumar strongly believes that trading is a learnt skill and that awareness needs to be created for trading as a profession for the common man. Tradonomix is one of his first steps towards this belief, from where he intends to take Tradonomix to an advanced technology-driven social platform for learning, and achieving financial independence.
The Gambler is someone who will take a shot in the dark, and pray that when he turns the lights on, the arrow has hit the target. Now why was the Gambler willing to take a risk on any particular stock? It could have been various reasons – intuition, a solid analyst report, a tip. But essentially, the choice is not because of any kind of calculation or risk/reward process – just a blind leap of faith. If the gamble pays off, this kind of trader is lauded as a maverick, if it doesn’t – well, you always knew him to be a Gambler, didn’t you?
By having no set process, no fixed aim, and no exit strategy, the Gambler is essentially living on a prayer. If the markets go up, he is happy, and, when the markets go down, he is anxious, perhaps mutters several more prayers under his breath. Far enough down this path, the Gambler is someone who is completely driven by emotion. He buys into Fear and sells into Greed and Euphoria.
Now what about the Strategic Trader? Strategic trading is essentially the opposite of gambling. The key characteristic of Strategic Traders is that they are skilled hunters – they are steadfast not only on their prey, but on developing processes by which to effectively hit their target. Strategic Traders ruthlessly assesses the risks and rewards of any stock, by studying it closely, and putting probability on his side. Like any good hunter, they are watchful of the patterns and movements of the stock – if the prey moves left or right, the hunter jumps quickly in the same direction.
In this sense they are completely unemotional, essentially the opposite of the Gambler. Think of the Strategic Trader as the eagle that soars above miles above head, eyes pierced for the slightest movement of its prey. The Strategic Trader, like that master hunter, knows when to let keep gliding, when to swoop down, and when to swoop up. There is no joy or fear for the soaring eagle – just a complete reliance on its unyielding vision. The eagle isn’t taking a gamble, it is taking a sure shot.
Which would you rather be? A Gambler or a Strategic Trader? Do you want to Live on a Prayer, or Prey for a Living?
About Author
Dr. SREEKUMAR RAVINDRAN
Founder and Chief Managing Director at Tradonomix
Dr. Sreekumar Ravindran, known as Saint in trading forums such as Trader Saint Forum & Traderji, is the visionary and mind behind Tradonomix. He is a passionate trader himself and has spent over 15 years in researching and accumulating knowledge of trading and applying the same in real-time.
Dr. Sreekumar strongly believes that trading is a learnt skill and that awareness needs to be created for trading as a profession for the common man. Tradonomix is one of his first steps towards this belief, from where he intends to take Tradonomix to an advanced technology-driven social platform for learning, and achieving financial independence.
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