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MTrader Class - February 16, 2011

Trading Zanshin  


MTrader Class (C) copyright MTrader  2011

by Gimmie      

[12:39] Gimmie : I have an aquaintance who is into martial arts.. and somehow this phrase came up... Zanshin
[12:39] Gimmie : It refers to a state of awareness – of relaxed alertness
[12:40] Gimmie : zanshin is the continued state of spirit, mental alertness and physical readiness to meet the situation
[12:41] Dez : I like the concept
[12:41] Gimmie : Zanshin contains mental, physical and even spiritual elements the warrior develops to maintain proper vision and awareness
[12:41] Gimmie : and I was telling him about the parallels in trading
[12:42] Gimmie : about how much of trading, is staying alert and aware.. over a long period of time.. but doing nothing until the exact right moment
[12:42] Gimmie : it requires a lot of patience
[12:43] bruce ge: Like the photographer who waits all day to capture the photo of the butterfly, who moves his wings just once.
[12:44] Gimmie : So I began looking into this term..because it intrigued me
[12:44] Gimmie : Acheiving zanshin at a higher level, one learns to maintain this presence in all 360 degrees by developing a heightened sense of awareness and through the knowledge of understanding probable reactions in all situations
[12:45] Gimmie : The true warrior uses a wide-screen view that takes in every detail of information.
[12:45] Gimmie : He develops the uncanny ability to understand all motives and tactics of all stakeholders, and eventually learns to predict the future before it happens. He learns to understand subtle nuances, which can indicate motivations and strategically maneuvers the situation to the desired outcome, based on the reality of the situation that many people never even see.
[12:46] Gimmie : The warrior’s ability to see all the systems and the effects of his actions on each one of them allows him to see the big picture. Warriors have long known that the best way to observe the actions of the hands and feet of his opponent is by watching the center and seeing them with his peripheral vision. This same tactic is used when observing, and seeing physical, mental and spiritual capabilities in yourself and others.
[12:47] Dez : good stuff
[12:47] Gimmie : Every time you look before you act.. it is a simple reminder to not take your eyes off your goals and to always truly look before you take action
[12:48] Gimmie : By developing zanshin, you will be able to accomplish more in a shorter period, than many people do during their entire lifetime.
[12:48] Gimmie : Most of the time.. is spent in this state of calm alertness
[12:48] Gimmie : The action itself is swift and short.
[12:49] Gimmie : watching the reactions very closely, taking in all the factors, so you will recognize the right moment to act
[12:50] Gimmie : So I began thinking about how this relates to trading, and I find it very similar
[12:51] Gimmie : most of our day is spent waiting.. examining the market.. watching our charts..  looking for a set up
[12:52] Gimmie : That is very difficult at times.. because we are anxious to act
[12:53] Gimmie : The elements of zanshin.. are alertness... awareness.. and patience..
[12:54] Dez : "Be quick, but don't hurry"
[12:54] Gimmie : When we are watching the market... we are often fighting with those elements.. fighting to hold onto all three of them
[12:56] Gimmie : and you really need.. all three
[12:56] Gimmie : at open.. we are often very aware.. closely observing the action... but not always patient...
[12:57] Gimmie : as the day moves on... we often lose the alertness.. we get bored and lose focus
[12:58] Gimmie : its a struggle.. to maintain the trading zanshin.. with all elements
[12:59] Gimmie : Another thing that occcured to me...while I was driving home after this conversation.. (which is probably why I am in so many accidents)...
[12:59] Gimmie : is that.. we often forget that we are "re"-acting.. rather than acting
[13:00] Gimmie : we forget to watch our opponent .. the stock.. and react to its movements...
[13:01] Gimmie : instead.. because we are struggling to maintain all elements of zanshin.. being patient among them...
[13:01] Gimmie : patience
[13:02] Gimmie : In our anxiousness to trade.. we fall into guessing.. predicting..
[13:03] Gimmie : For example.. we see a setup forming... lets say the 120 tick is at the 50 ma.. and 1 min chart bottoming.. 3 min bottoming.. and we believe this is going to be a good long opportunity
[13:03] Gimmie : instead of waiting for the break above the 50 ma.. and jumping along for the ride... how many of us "assume" it will break.. and get in early?
[13:04] Gimmie : Thats a difficult habit to break
[13:04] Gimmie : anticipating, instead of waiting for confirmation
[13:05] Leighton J: a never ending struggle against human nature
[13:05] Gimmie : We look at our opponent.. and decide we are going to strike out, before they have a chance to..
[13:05] Gimmie : and that opens up our weak spot
[13:05] Leighton J: and a glorious stop fest
[13:05] Gimmie : Many times I notice that.. we "decide" on trades...
[13:06] Gimmie : When we see a situation like I described above, we decide for ourselves, which way its going to break.. We decide where we believe the stock is going.. and we act according to that belief
[13:06] Gimmie : But a trade will be far more predictable.. if you let the stock decide for itself
[13:07] Gimmie : You can't force it to do what you think it should.. and your guesses are so often wrong... why not just let it decide for itself.. and hop on?
[13:07] Gimmie : Do you know this feeling....
[13:08] Gimmie : You are in a trade... you just entered.. you are nervously watching it, thinking it will go your way.. but not totally sure..
[13:08] Gimmie : then.. it begins to tick your way... and a feeling of relief comes.. because it becomes SO obvious that its going your way.. and
[13:09] Gimmie : in that moment, you know that the liklihood of you getting stopped out.. is very very small now... big sigh of relief
[13:09] Gimmie : So... what if.. you just waited for that moment to enter ?
[13:10] Dez : you'd feel better about your trading
[13:10] Gimmie : Watch... observe.. be alert.. be aware.. be patient enough to wait for that moment...
[13:10] Gimmie : That is what.. Zanshin is...
[13:10] Gimmie : that state of calm awareness..
[13:10] Gimmie : alertness.. observation.. patience
[13:10] Gimmie : And... that state.. is most of our day
[13:11] Gimmie : the actions... are a very small time
[13:11] Gimmie : So your struggle.. is to maintain Zanshin.. all morning long
[13:11] Gimmie : We often think that.. just sitting here is wasting a lot of time
[13:12] Gimmie : that.. we arent really "working"... unless we are acting
[13:12] Gimmie : but maintaining Zanshin... is our work
[13:12] Gimmie : By developing zanshin, you will be able to accomplish more in a shorter period, than many people do during their entire lifetime.
[13:12] Gimmie : The end
[13:13] Gimmie : now you can joke :-)
[13:13] Dez : this class was no joke
[13:13] Terry Trumbull: great class
[13:13] Gimmie : thanks
[13:13] Leighton J: can I go out and play now? can I huh/ Can I huh?
[13:13] Leighton J: excellent class Gimmie, very timely.
[13:13] Gimmie : lol
[13:14] Gimmie : thanks leighton
[13:14] Gimmie : class dismissed
[13:14] Dez : this explained, very well, what i do every morning to prepare for the open
[13:14] Dez : what Cat taught me was more important than anything else
[13:15] Gimmie : martial arts warmups ?
[13:15] Dez : calmness, readiness to move in any direction
[13:15] Gimmie : Zanshin you mean :-)
[13:15] Dez : not being commited to anything but acting on what is apparent
[13:15] Dez : yes
[13:15] Dez : apparently
[13:15] Dez : ;o)
[13:16] Gimmie : now we know.. theres a name for it
[13:16] Dez : I bet he knew
[13:16] Gimmie : dunno.. I got that from martial arts websites..
[13:17] Dez : one learns to maintain this presence in all 360 degrees by developing a heightened sense of awareness and through the knowledge of understanding probable reactions in all situations
[13:17] Dez : this.
[13:17] Gimmie : yes.. I snagged it
[13:18] Dez : Really really excellent stuff
[13:18] Gimmie : paraphrased





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