STRATEGIES

Steve Morris is an active trader and the author of a new book out this month, Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades. In this interview, we talk about Steve's methods for trading, the indicators he uses, and how his trading techniques change based on the "season" of the market.

Steve also explains how fly fishing is similar to trading, and how learning how to be a better fisherman helped him become a better trader. You can find Steve's website here.

Steve Morris is an active trader and the author of a new book out this month, Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades. In this interview, we talk about Steve's methods for trading, the indicators he uses, and how his trading techniques change based on the "season" of the market.

Steve also explains how fly fishing is similar to trading, and how learning how to be a better fisherman helped him become a better trader. You can find Steve's website here.

Tim Bourquin: Hello everybody, and welcome to this week’s interview. Thanks very much for joining me. My guest today is Steve Morris. He is the author of Fly Fishing the Stock Market, How to Search for, Catch, and Net the Market's Best Trades.

I thought that was interesting title. I’m not much of a fisherman myself, but I love all the trading analogies that are out there, and I hadn’t heard this one before. So, I wanted to get Steve on the line and talk about that, find out a little bit about his trading too. So, Steve, first of all, thanks for joining me on the phone today.

Steve Morris: Thank you, Tim. It’s good to be with you.

Tim Bourquin: Alright, let’s talk about why fly fishing is like trading. Tell me what’s that about?

Steve Morris: Well, fly fishing is very similar to trading. Every aspect of catch and release fly fishing as it’s commonly referred to. It’s similar from stocking the prey to managing the catch and landing the fish and basically all the important details in between.

Tim Bourquin: Okay, well, so, I mean—sure, it takes probably patience as well too that makes sense to me?

 
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Steve Morris: Oh, absolutely. I mean there are so many different parallels. I think what I drew from comparing the two activities the most, what I’ve learned the most is it basically deals with seasons and strategies.

If you take fishing for instance, fly fishing, fly fisherman encounters the constant need to match the hatch or match the current fly pattern that fish are feeding on at any given point in time. And those vary, those are cyclical, they’re repetitive, they are not random and they are different from season to season.

And it’s similar in the stock market, the stock market has cyclical patterns to it and it’s important to recognize those price patterns and trade in lockstep with them. They are certainly repetitive and not random.

Tim Bourquin: Let’s talk about how you kind of approach the market. So are you a daytrader, a swing trader, or what do you do?

Steve Morris: Well, that’s a good question. I think every trader is plagued with those questions, am I a day trader? A swing trader? Or do I prefer to buy and hold? And I think the real answer is all of the above and it all depends on what season the market is in and what the particular price patterns are.

For example, if it’s what I refer to it as a spring season, where the MACD lines of the general market on a weekly basis are turning up, all the shorts are on board, they are overbalanced and they get squeezed into an up trend, bargain buyers jump in, that’s certainly a time when you want to getting along is the preference and you want to stay with the position longer, because pullbacks are very shallow and usually those are when the big catches are.

And a stock that you trade will usually have some saying power, unlike a choppy volatile market where the market really has no direction and it’s very volatile, those are times when I prefer to be a day trader and just get little chunks of channels.

Tim Bourquin: So, you don’t define yourself or put yourself into a box I guess, whatever the strategy is, whatever the fish are biting on, that’s what you’ll use, right?

Steve Morris: Absolutely, absolutely, if I define—if I—for instance, from a fly fishing perspective, if I say this is my favorite fly, I’m going to fish this fly everyday, every month, every year in the same fashion, I am seldom going to find success and I think the same applies for the stock market and our approach to that.

Sometimes we’re buying breakouts, sometimes we’re buying pullbacks, sometimes we're buying deep pullbacks and patterns change and strategies are changing and synchronize with that as well.