Saturday, January 20, 2007
The Wisdom of Bruce Lee
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
I had an e-mail exchange yesterday with a reader that reminded me of my early days in trading. The reader has been analyzing the way I trade and noticed that I only trade a handful of patterns. His question was, "why are you limiting yourself to these few patterns when there are so many out there that work?" He then proceeded to list all the patterns he trades and some opportunities I had missed out on.
My response was the above quotation from Bruce Lee. I would rather master a few patterns than become a jack of all trades and master of none. As you may have noticed, a pattern that I'm currently working on is the "head and shoulders" pattern. Is knowing what this pattern looks like enough to mint money off this pattern? Take it from my first hand past experience, the answer is a resounding no! To truly master the pattern, you need to know how this pattern reacts with volume, price bar length, and indicators such as RSI, stochastics and MACD. Of course, that's just a starting point. The next step is to test different markets and sectors. After that, you test . . . well, I think you get the point. It's better to intimately know a few strategies than to be moderately fluent in many.