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How Can Native American Hunting Methods Improve Your Trading?

 

Hundreds of years ago, native Indians in South America used creative ways to gather food and means of living (as well as to communicate with each other).

 

The people of one specific tribe, used, and still use today, an ancient method to hunt and capture monkeys.  They take a large coconut and drill a small whole in it.  They tie the coconut to a tree and then empty its content and replace it with nuts. 

 

The monkeys, smelling the nuts hidden inside the coconut, come running down the trees and pushing their fingers through the small hole, grab a handful of nuts.  With the prize nuts in their hands, they cannot pull out of the coconut and therefore, they are “trapped”.

 

Now, the hunter simply comes out of hiding, and, approaching the “trapped” monkey tosses a net over it and the monkey is then carried away.

 

What is mind-boggling about this olden hunting method is the fact that the monkeys are never really trapped!  All the monkeys have to do in order to break free – is open their palms, let the nuts drop, and pull their hand out of the coconut.  It is astonishing, but virtually every time, the monkey will choose the nuts over escaping the approaching imminent danger.

 

Isn’t it truly amazing that so many traders manifest this same behavior again and again?

 

Time and again, so many traders will choose not to let go of a trade, no matter what unfavorable circumstances reveal themselves, no matter how grave a danger presents itself, somehow, so many traders find it impossible to “let go of the nuts”.

 

Often times, when a trade “goes bad”, it does so in stages.  Things happen differently than we anticipated, many times giving us ample time and opportunities to reconsider our position.  So many traders ignore those warning signs and hold on to the prize, until it is too late and the net is upon them…

 

Sure, not letting go is in our basic nature and that for virtually all of us, there is no way to avoid the sensation.  But remember also, that one distinct quality separating us from other animals is the ability to consciously make a choice which is independent, or even contradicts, our instincts. 

 

Next time you see the signs and feel the imminent danger approaching, remember that tomorrow is a new day, that there are many trees with food in the forest, and that by avoiding being carried away inside a net, you will get to have another day in the market.

 

We hope you find this note useful.  To read more about options trading strategies, to test your knowledge with our interactive quiz, or to check out our FREE corner, visit us at www.TheOptionsAcademy.com or call us with any questions at all at 888-6-GET-TOA (643-8862).

Good trading and good luck!

 

David Rozen

 

 

There is substantial risk of loss in trading futures options.

Past performance is not necessarily indicative of future results.

Only risk capital should be used.

 

 

 

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