Gone Fishing: How to Catch Whopper Trades

Gone Fishing: How to Catch Whopper Trades

Like many, I learned how to fish from my late grandpa.

I could go a day with only a few bites, yet he always seemed to catch his limit of fish.

He was an ‘Okie.’

He and the rest of the family left Oklahoma and settled in California when the Dust Bowl decimated farming back in the 1930’s.

He knew what it was like to be poor and hungry.

I saw an old school picture of him and his classmates – about half didn’t wear shoes.

So when he went fishing, it was for food, not sport.

Back in the 70’s, we used to travel around in his motorhome from fishing hole to fishing hole.

Those were the days.

I learned how to tie knots, bait the hooks, and cast from an early age…

…but I’d get skunked while he cleaned up.

One day, after what seemed like an eternity to a five-year-old, I asked him to find another spot because we hadn’t had even a nibble.

“Be patient son,” he replied calmly in his southern drawl.

“Just keep an eye on the tip of your pole.”

To a five-year-old (and even now), a random wave can look like a fish is attacking the bait.

So I’d constantly check my worm and recast while grandpa tranquilly waited, and reeled in fish after fish.

“Grandpa, what am I doing wrong,” I asked.

“It’s called “fishing” not “catching.”

“The fish don’t want to be caught, so you gotta out-fish the fish.”

That stuck with me for the rest of my life, and served me well into my trading career.

Stocks don’t want to be “caught.”

Especially the big whoppers.

The price will buck and shimmy just enough to shake off all but the most stalwart of traders.

Maybe you’ve experienced a nice winner, then snuggle up your stop loss to break-even…only to see it hit before the stock zooms right back up.

Maybe you make trades and then get impatient and move on to the next one when it moves sideways.

Or maybe you go from guru to guru, system to system, and lose your patience — and your money.

Meanwhile, the pros are catching their “limit” of profits while you struggle and wonder why.

Within a couple years I was hauling in monster fish alongside grandpa.

My biggest problem was that my arm would get tired from reeling in the fish.

How? I simply copied what he did.

When he cast, I cast.

When he reeled in, I reeled in.

I imitated a seasoned fisherman – and got pretty dang good at it.

Flash forward to a few years ago.

I was doing a favor for a friend of mine.

He wanted me to help one of his coworkers with his trading – my understanding is that he had lost a bunch of money in options, and his wife wasn’t too happy.

I don’t normally do that sort of thing in person without a 5-figure consultation fee as repellent, but I figured I could point him in the right direction during our friendly poker game.

Long story short, he argued with me about everything.

He wouldn’t believe that you make more money buying stocks that are going up.

He wouldn’t believe that the futures market controls the stock market.

That’s how entrenched his dogma about the stock market had become.

It’s as if I had told him the earth was flat, and aliens were harvesting cheese on the moon.

Finally, my buddy piped up and said, “a millionaire just told you how he's beating the market, and you’re not writing down everything he’s saying? WTF is wrong with you”?

His his face grimaced like Angelina Jolie had slapped him for peeping in her window.

Needless to say, he never came around for poker again – nor was he invited.

As grandpa would say, “son, you can lead a horse to water, but you can't make him drink.”

Trade smart,

Dan “Prince of Proof” Murphy

Note: Since 1900, the first year of a newly elected president has been the worst performing. With Trump in the White House, 2017 is shaping up to be Six Flags roller coaster of a year.

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