Surfing the waves

Here are some thoughts about the parallel between surfing (the sport) and directional trading.

Ride the waves!

There are lots of common points between surfing and trading :

1/ Waves breaking on the shore are random and hardly unpredictable. They are shaped by many factors like ocean swell, shore depth, wind , currents, etc... Forex waves are the results of traders' actions, news, events, and more. They are similar to ocean waves.

2/ One must know security rules while surfing a board. Being aware of currents, knowing how to do ducks to slip under incoming waves, having a leash, and so on. Trading the forex without a SL and with leverage is like surfing a risky spot without experience and knowledge.

3/ One must know his surfing spot, as a trader must know the volatility of his market. A surfer will be easily wiped-out by waves in a spot he does not know. It will be the same for a fx trader doing his very first steps in a stock exchange : unknown market equal to very high risk of loss.

4/ Technical skills and a good instruction are necessary to surf/trade properly. A trader with a good instruction will often be profitable whatever the state of the market. A surfer with a good instruction will be able to ride nice and big waves.

5/ A trader must have a very strong but relaxed mind. To reach this state, a lot of sport must be done. A surfer must also have an excellent physical condition, especially to paddle his board toward the line-up (place where all the surfers are waiting for the waves).

Riding a wave gives the same feelings as trading and following a trend.

As you are awaiting for this nice wave and when it's coming you must not hesitate to take-off and ride it all long : in trading words it this means let profits run.

On the contrary, if the wave is a weak one or the take-off is unsuccessful, the best choice is to step out of the wave and wait for the next one : in trading words this means quickly cut your losses.

Finally, if you miss several waves and are wiped out by them, you'll need to paddle and paddle again to the line-up for the next waves. It's very exhausting : in trading it means large drawdown on your equity curve. It's better to stop surfing/trading for the day.

Conclusion

Use surfing lessons to improve your trading skills : strenghten your mental and technical skills, wait for the right waves to make a good take-off and in case of a bad take-off exit quickly the market to avoid a major wipe-out.

Use trading lessons to improve your surfing skills : Take your board and ride some waves. In my humble opinion it's far the best sport for a trader!! If you don't have the chance to be near a surfing spot, relax and watch some on YouTube and Dailymotion.