Recently i read a good article , which may be helpful
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Learning from Crocodiles?
In tropical Australia, the saltwater crocodile is a fearsome and intelligent predator known to wait patiently for days or weeks on end until unaware prey come to the water’s edge and become its next meal. Crocodiles are by many accounts the most successful animal that has ever lived; they’ve been around for about 200 million years and have out-lived the Dinosaurs, and they’ve evolved over time to become perhaps the most successful predator on Earth, next to humans. Crocodiles are opportunistic predators; they’ve been known to learn the behavior of their prey and lie in wait for long periods of time almost to the point of starving, and then when the time is right they snatch their prey with confidence and precision.
In fact, it is quite common for people to swim with these animals for days or even weeks without any sign of aggression, until one day somebody goes swimming, fishing or even walking, and they never return. This demonstrates real-world evidence that one of the oldest and most methodical predators on Earth is also one of the most patient and disciplined that has ever lived. Darwin’s survival of the fittest theory certainly favors this creature; they’ve been around since Dinosaur times because their method of hunting and adapting is so successful. The salt water crocodile is perhaps nature’s ultimate “sniper”… it only needs to eat once a week or so because it makes high quality kills rather than a high quantity of low-quality kills.
As traders, there’s a ton of things we can learn from the crocodile, let’s discover some of them… Some of these are :
Crocodiles are a trader’s best role model :
They wait in prey for the big juicy meals rather then morsels of shoals of small fish that pass them buy. Crocs are designed and have evolved to be patient “sniper” hunters…many little meals do not interest them as much as a big juicy nourishing meal does. By trading less… our aim is to make a nice large “meaty” size trade that sustains us until our next trade. Sure we may have a few losses along the way to our big prize, but the goal here remains clear; waiting on the sidelines (or the shores of the river like the crocodile) to pounce on our prey and cop a huge nourishing meal. We don’t want to be running all over the pond or river looking for any small piece of meat or fish that we can find…we are going to wait it out and score ourselves a nice big juicy profitable trade (or in the crocodiles case, probably a kangaroo, a dog, or maybe even a human).
Crocs have a high strike-rate: It’s fairly safe to say that if a croc gets its jaws around its prey, the prey is not getting away.
Crocs have a good strike-rate because they are patient and wait for the “easy” opportunities and then act with confidence and speed…they don’t hesitate. Whereas a Lion might have many failed hunting attempts trying to catch a Gazelle or some other quick animal, expending a lot of energy in the process, crocs tend to have less “losing trades” or failed hunting attempts…because they don’t waste time or energy…they wait and wait and control themselves with precision until their prey almost walks into their mouth…then they feed.
As traders, waiting and being patient can increase your strike rate. Controlling ourselves is really all we can do as traders…we cannot control our “prey” (the market)…we can only conserve our money and wait patiently until our trading edge presents itself. This is how you get a high strike rate as trader, not by trading a hundred times a week in some futile effort to “scalp” the markets.
Crocodiles are good at avoiding risky situations; they learn fast:
Crocs “…learn quickly and adapt to changes in their situation. They particularly learn to avoid dangerous situations very quickly”, according to the article The Extraordinary Lives of Crocs. The article went on to discuss that this ability of crocs to learn quickly and avoid dangerous or risky situations is yet another reason they’ve outlasted the dinosaurs and are still thriving today. Avoiding risk is one way that a species can survive over time and “win” the evolution battle of the fittest. Similarly, not taking on more risk than is necessary as well as learning quickly are two very important keys to becoming a successful trader.
Conserving energy for the next kill: The crocodile waits for the big meal because it makes more sense to wait and conserve energy by eating a large chunk of protein less often. The croc conserves energy and time by eating this way and it also is one of the main things that have ensured the survival of crocodiles over hundreds of millions of years during many periods when food was scarce.
If you think about not interfering with your trades as helping to make you money, it might make it easier to do. I actually imagine that I am making money by not trading and by simply doing nothing, because by not losing money from over-trading and over-involvement…technically you ARE making money. A crocodile would probably eat less food overall if it was constantly running around trying to find small prey, the crocodile intuitively knows that by being patient and disciplined it has a better chance at getting a higher-quality meal. The crocodile “knows” itself and its own limitations and uses its strengths to its advantage. Indeed, the fact that the crocodile has been around since dinosaurs walked the Earth is evolutionary proof that the concept of patience and discipline most certainly pays off.
The crocodile intuitively knows that it needs to conserve energy and wait for a big kill, this patience is actually a “skill” for the crocodile and it’s also a habit that has developed and reinforced in crocs over millions of years of providing them with large tasty meals. Longevity is critical to a trader; we need to conserve the money in our trading accounts so that when the “easy prey” or obvious trades come along we can get the most out of them. If we go around trading everything we see we will shrink our trading accounts and we won’t have enough money in our accounts to get the most out of the high-probability signals. Just as if a croc ran around all day trying to catch smaller prey it would not have the energy or positioning to grab the bigger and better prey.
Crocodiles are highly adaptable:
Crocodiles learn quickly and adapt to changes in their situation. This is a large part of how and why they have survived for millions of years whilst many other animals have become extinct during that same time. According to the article I mentioned earlier’The Extraordinary Lives of Crocs’; “…crocodile researchers often have to change their capture techniques because it’s very hard to catch them [crocs] with the same trick twice.”
Many researches think that the adaptability of the crocodile, including its ability to “ignore” hunger for long periods while it waits patiently for the “perfect” feeding opportunity, is one of the main reasons they survived whatever killed off the dinosaurs. It’s clear that the crocodile’s ability to adapt to its environment and to changing situations is one of the reasons it has survived and thrived for millions of years.
As traders, we have to adapt to changing market conditions, and as we’ve already discussed we need to haveice cold discipline to only trade when our “prey” is ripe for the taking. One of the beautiful things about price action trading analysis is that it’s an inherently adaptable trading strategy. Whereas many trading systems are rigid and make you stick to a strict set of rules or conditions, price action analysis gives you more of a “framework” to work off of when analyzing the markets and this framework can be used to trade any market condition as well as adapt to changing market conditions.
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