Enter the “trader zone”…. wait, wait, wait, wait- pounce…..
“A lone lion usually has a hunting success rate of only 15%. Though during a night hunt, their success rate can climb over 40% . In areas with tall grass, they manage a success rate of over 50% because they are able to get much closer to their prey before striking = manage their risk, trade their edge, and once in the trade go for the jugular.” – Shane Yates
Even though lions are the king of beasts, when hungry they do not run out onto the savannah and chase their prey randomly thinking that they will just chase it down and get their dinner. Lionesses hunt in packs and only go after the weakest wildebeest in a herd. They have a huge amount of patience waiting and watching for hours to find the best opportunity of chasing down prey that they can catch. They look for the high probability successes before they give chase, the young, the slow, the old, or the sick are all their best candidates for dinner. They do not waste time and energy in low probability chases they strike where they have the greatest advantage.
Individual traders have the edge of choice and waiting, while the big money funds have the pressure of putting capital to work and monthly performance for their investors. Also mutual funds have to be close to fully invested most the time and have to diversify themselves into oblivion not really getting much bang for their buck on any one position. We do not have the same pressures, we can wait, we can be patient, we can strike only when we have the most advantage and best odds of being right. We can trade like a lion hunts so we don’t end up being the weakest wildebeest ourselves.