Today's Quote: “When a bonsai stops growing, you know it's dead” Japanese Proverb

There are several good books out there about trading that should be on every trader’s must read list. If you were forced to choose one and only one, the only possible pick would be “Tools and Tactics for the Master Day Trader”. We are going to run a series of excerpts from the best selling book for the next series of lessons. Now in the words of the master trader himself, Oliver L. Velez…

GROWTH IS A FLOWER THAT BLOOMS WITH TIME

I know it may seem strange, maybe even incredible. But it is imperative that developing traders refrain from judging their growth or success by the outcome of individual trades. Yes, the objective of each trade is to make money. And yes, we do call traders successful if they manage to win more often than lose. But winning traders are really the senior versions of traders who have become winners. In other words, traders are not successful because they win. Traders win because they are successful. Winning is the flower that blooms after the long, successful journey of growth has been made. Winning rarely, if ever, occurs during this journey, and it certainly cannot occur before the journey. Said another way, traders progressively making each step in their journey of growth are usually still losing. In fact, it is actually the losing that is planting the seeds of that very growth. You see, there is a period during which traders' outer successes, in other words their winning trades, will not reveal themselves, despite the fact that phenomenal growth is taking place underneath. This is because growth initially takes place below the surface. It gradually, almost secretly, builds mass within us, not unlike the conceived, yet unborn, child who develops for 9 months without any outside witnesses. Unfortunately, many traders never realize that growth is actually taking place amid their painful losses. They fail to recognize that each loss is actually propelling them closer to the ultimate goal of success. And it is this short-sightedness that causes many to drop out and quit, right in the middle of their progressive journey. Judging your internal level of growth by your outer wins and losses is a mistake. Judging how frequently you lose the same way is a better way to measure your growth. Let us repeat that. Judging how frequently you lose the same way is a better way to measure your growth. Just because your trading ledger is in the red does not mean you are not moving forward. If handled properly, the red will eventually give way to trickles of black, and before you know it, you will start to feel the first glimmerings of mastery. But it must never be forgotten that mastery is not born. It is developed. It never comes into existence instantly. It requires an incubation period, during which it gains mass and strength. Those who realize this have much greater odds of lasting. And, once again, we feel compelled to remind you that in order to win, you must last.

Whenever gardeners plant the seeds of new flowers, they understand that a portion of a seed's growth must take place underground. Those who walk by the garden looking for the outer signs of that growth too early will surely be disappointed, but not our gardeners. On their faces will be planted permanent smiles, produced by their full understanding of nature. Even though they will not be able to witness this process throughout, they rest securely in the knowledge that the miracle of growth is happening within. Soon this hidden growth will make itself known to the outer world. In time, they know it will emerge in the form of a glorious flower, and its splendor will delight all who come to see it.