For those who enjoy watching war movies would undoubtedly like the show American Sniper. The show talks about a legendary U.S. Navy SEAL sniper, Chris Kyle (played by Bradley Cooper), and his tour in Iraq.
A sniper in the military is an important asset. Although the number of kills that they made may not be as much as infantry or any other units in the military, but their presence in the battlefield sends shivers in the mind of their enemies.
Armed with their sniper rifle, the sniper is able to suppress their enemies using fear of when the next round would be shot and who will be hit. It is, however, not just their rifle that makes them effective. There are many other traits of a sniper that terrorises the enemies.
Less is Better
As seen in the show, or any other war movies portraying snipers, the snipers do not fire as much rounds as a typical machine gunner in a battlefield. The snipers will wait in their positions for their target to come to them, firing only when they have the perfect set up.
Similarly to trading, while beginners may feel that the more trades they take, the more successes they will have and that will mean the more profits they will be able to make.
Entering a trade is like pulling a trigger of a gun. The more rounds that you squeeze off at one shot, the lesser time you will have to aim at your target. Instead of hitting the target more often, you will likely to miss the target more often.
Going for Higher Value Targets
Unlike a machine gun where it can hold hundreds of rounds, a sniper may have only five rounds loaded into his rifle. With the limited number of rounds available for them to use, it is important for them to go for higher value targets instead of any infantry man on the battlefield.
As traders, we also do have limited resources. To make the most out of it, we have to learn from the sniper and only take out targets that have higher values.
Strategise the Shots
A sniper will sometimes encounter more than one enemy close to each other, and when one of them gets hit, the rest may be alerted and would probably start to come after him/her. Strategising the shots, from when to fire and the sequence of who to target in this scenario will be important.
Strategising your trades are as important to the trader as strategising the shots are to the sniper.
A well-strategised trading plan will mean that the trader had already thought through carefully on how to make the next trade. A well planned trade will also mean success.
Another important traits of a sniper is the ability to wait for the right time for the right shot. They will motionlessly stay in one position for hours or even days just to wait for the perfect shot to be line in their scope before they pull the trigger.
Similarly in trading, placing an entry order and wait patently for the right price to trigger is important. Because if all the trades are being entered using placed entry orders, we are force to look carefully at where the price is right to enter the market and set the price when that trade is no longer valid (through placements of stop losses).
After placing the orders, all the trader has to do is to wait patiently. Wait for the price to come to you.
Yes, there may be time when the other stock or Forex pairs have moved while the one you chosen did not hit your entry orders and you lose your chance entering the trade. Look back and reflect why your orders were not triggered and refine your entry order placements.
Fear not. There are so many things to trade and there is bound to have something to be traded everyday. Be patient and wait for the price to come back to you or move on to the next “battlefield”.
The Bottom Line
Learning from a sniper on the battlefield and apply what you have learnt in your trading career will definitely benefit you as a trader. While at times it can be frustrating to see the entry orders not being triggered, missing by that few pips, and if entered you could have earned thousands of dollars. What we should learn, minimally, is patience. With patience, you will be able to execute your trades with confidence that you had made the right choice.