Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades

CONCLUSION

On any given day, anglers know that they have to match a fly to what the fish are currently feeding on. Standing in a stream, one can often see multiple hatches, with various fish feeding on nymphs, emergers, as well as duns. New fly fishermen often become confused trying to figure out which fly to use.

I use a trick for solving this problem. It involves using three different fly patterns in an alignment, tied to the same leader. First, I tie on a dry fly imitation of the main hatch. Then, I drop two other fly patterns that are connected to the first. The first addition is an emerger positioned 12 to 16 inches from the dun. The last fly is a small nymph positioned 12 inches from the middle fly. I let the fish resolve the confusion of which fly to use; I use the one that attracts the most fish. This three-pattern combo tends to be highly successful—as long as I manage not to hook my own ears on back casts.

Trading is similar to fishing: we need to combine several tools that work together to enhance our results. Adding a well-selected indicator improves our odds of success, just like dropping an additional fly from the main fly. Why struggle with a single trading signal or a single fly that often fails to bring success? Combining multiple tools with positive fundamentals and favorable price patterns can help us identify trading opportunities and ride magnificent moves. The more variables are aligned, the stronger the breakout and the longer the staying power of a new trend. ...