Storm chasers and day traders have a lot in common.

Perhaps it's the stormy mood or the stormy market trends taking place over the past few months that brought to mind how similar day trading is to storm chasing. Success in both endeavors include many of the same attributes in personality and skill though the mediums we work in are very different. If you make a mistake as a storm chaser it may cost you and your team their lives, as a day trader it may cost you your entire life savings and in that moment, you might think those were the same thing. So let's feel the rush, the awe, and also take caution and care to live to witness the storm another day. 

Whether it's stocks or storms, we are chasing a moment in time. In attempt to capture action in a moment that is ultimately beyond our control and make the most of that moment for our enjoyment and benefit and walk away in good shape.

In order to do that it is essential to know where you are and often, in order to be profitable you will find yourself in a highly volatile and risky situations. That is a part of the process. You will have put yourself there voluntarily because you want to be there. Others do not understand what we do, that if you have the proper training and mindset, you can know where to stand in the storm, get what you want from it and go home unscathed. However, if your head is not in the game or you get reckless there will be a cost. What that cost will be will be taken out of your hands by the storm or the markets respectively. 

Life is a storm. One minute you will bathe under the sun and the next you will be shattered upon the rocks. That's when you shout, "Do your worst, for I will do mine!" and you will be remembered forever.
-- Alexandre Dumas

Know where you are. 
The first thing that chasers do is to find the most likely place to find the location of touchdown. There is never a guarantee of certainty however, there are ways of knowing where to look. Often we talk to others in the industry to know the choice spots for what we are looking for. Areas of interest that historically produce the type of volatility we are looking for the Tornado Alley of the market. This is where many competitors fight for the best spot, while the traders compete for the best price, in the end it's an educated guess. But in a game where a couple feet or a couple pennies make a difference, experience, mindfulness, and position, matters a great deal. 

Have the right equipment. 
You don't want to face a twister or a volatile market breaking off the open without the proper tools. You want to be able to scan for trades like scanning the skies for the clouds and formations that produce the events that bring the results you're looking for. The better your equipment and funding, the more storms you get to chase. It is not prudent to go into either of these endeavors overly eager, without proper information, unable to scan what is happening or being undercapitalized so that one mistake takes out your entire season, or in the example of trading your entire account. Panicked minds do not make good decisions. One must be calm, aware, and able to act in the moment with training to manage whatever situation the trader or chaser finds themselves in. 

As a trader the tools are trading platforms with Level II ladders, scanners, and a network of traders with common goals and expertise. These are as vital to our mission as maps, Doppler Radar scans, and ham radio networks are to storm chasers. They are essential for protection and success. 

Know what you are doing. 
The beautiful and dangerous thing about both trading and storm chasing is that there is a relatively small barrier of entry to both endeavors. Technically with a lap top, some software, and a couple hundred dollars a person can technically start trading. The way anyone with a vehicle and a cell phone could start storm chasing. That doesn't mean because you can, you should, or that taking on that kind of high risk adventure should be done without some training and education. Yet many people do it. YouTube is full of them all. Random people walking outside to take a live video of a storm passing their house and various financial gurus with their get rich program to make you rich in 3 days using proven techniques. Some get lucky, and it works for them, however the majority that try it get hurt if not devastated by the results of doing something that requires a high level of information and skill to maneuver properly with no prior planning or effective exit strategy when the storm starts heading in the wrong direction in a hurry! 

Experienced mentors are great, but personal experience must be earned it can't be bought. 

A great place to start chasing your passion is with someone who knows the terrain. Who has been there, who has learned from the storms, and who has learned to come out unscathed on the other side. Sure there may be some scary times, some cracked windshields, some 2X4s embedded in the door. Just like there can be 5R losses if you don't place a stop loss correctly. Things happen  and even the best laid plans can go awry. The storm teaches storm chasers and the market teaches day traders. In order to learn you must show up and interact with it. The more you show up and interact with it the more accustom to stocks patterns you become. The quicker you notice when they change direction and you can either change your position by adjusting your target or stop loss, decide to not go in, or get the hell out when that bad boy is moving against you! Live to chase another day. 

Data, data, and more data!!!

Information is everything! Journal, back test, and review strategies. Where did it happen (which stock)? What time of day? What was the environment like at the time? How did the pattern form? How long did it last? The more data the better. Which can be used for better execution of the plan at a later date when similar conditions consolidate whether in the sky or on a chart. 

​For the love of the chase...
For those who have caught the bug there is a love and a desire to face the beast every day and see what beauty and magic awaits. The wins and the losses over time. The consistency that comes from the chase. But then when that perfect pattern starts to form and the excitement starts to build as the checklist is ticked and we know this has a good chance of being the one and a pattern forms and away we go! That makes the work worth it. Whether it's the cupping clouds that produce the touch down of twin sisters in the middle of a corn field or whether its a buy set up that rips to the moon. Those are the moments that we chase for. That's where our money is made. 

If you would like to learn more about day trading visit www.livetraders.com or follow the
​Live Traders YouTube channel 

Author

Sophia is a #momtrepreneur living in Scottsdale, Arizona.