The “Hunter-Speculator” trading philosophy is an approach to trading that akin to hunting.
The most popular example to this style of trading is that of a big cat (or small cat!) style of hunting, stalking their prey, waiting patiently for the right moment to POUNCE.
This style of trading gets it’s brutal name due to the process of which a trader must go in order to patiently wait for the right moment, and not blow the opportunity due to emotions or impatience. This style involves:
- A strategy, a specific procedure for stalking a big trading opportunity
- Knowledge of the ‘terrain’ – knowledge of the possibilities of price movement, price reaction and how to adjust.
- An understanding of one’s own capabilities to either catch the prey or catch bigger prey. (money management position sizing.)
- Patience to execute the strategy correctly
- Patience to not force low probability opportunities for that would waste time, resources and potential easier opportunities.
- Removal of emotional distraction: fear, complacency, elation, greed…
- Continual attention, not taking eyes of the prize
- Enough aggression to go for the big ‘kill’
This Hunter Speculator style as been a popular one with traders and investors throughout history. I attribute this style actually to Warren Buffet and George Soros.