ARE YOU STUCK TRADING IN A ROCKING CHAIR?
Source: http://www.thecrosshairstrader.com/2009/06/are-you-stuck-trading-in-a-rocking-chair/Posted on Thursday, June 25th, 2009 | In Investing Lessons, Market Commentary, Trading Lessons
O.K. I know what you are thinking: you are off your rocker!
No I am not. At least not today anyway.
So, what do I mean by “rocking chair trading”?
Think about a rocking chair and what it does: it moves back and forth but never moves you forward (unless you fall out of it!). That is what a rocking chair is designed to do. It is designed to keep you in a relaxed state as you rock back and forth.
If the trader has a good trading system and the discipline to follow it there will always be times when there is little to no progress, just like in a flat market (also known as consolidation or accumulation). That’s just the way it is. You can either relax during this time or risk exposing your trading to higher than normal risk (and possibly fall off the porch). Why a higher risk?
During these times in the market (and in trading) patience can easily run thin causing you to chase trades. This is a losing battle.
The answer to rocking chair trading lies in your perspective:
1) Accept what the market is doing and wait for the next move, whatever it may be. Go do something else. Anything but trade.
But if you feel you must trade…
2) Shorten your time frame for trading. This may mean going from a daily chart to an intraday chart.
3) Trade less. Nothing wrong with trading with less money or less often than usual. That way you won’t lose your shirt in the process.
4) Take quicker profits. Enjoy hitting singles over and over again. At least you won’t strike out.
Rocking chair trading does not have to be saturated with worry, anxiety, and doubt. Set your chair on a good foundation of rules with a solid perspective and you won’t risk the possibility of falling off the porch. You just might find it to be as relaxing as it was designed to be.
Post from: The CrossHairs Trader
ARE YOU STUCK TRADING IN A ROCKING CHAIR?
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 About David Blair (http://www.thecrosshairstrader.com/)
THE CROSSHAIRS TRADER focuses on the most important tool at the technical trader’s disposal: the mind. From experience, I truly believe that no trading system-or edge-will ever consistently provide profits unless the trader learns the thought process necessary to make it work. A trading system is only as good as the trader utilizing it. Get your mind right and you will trade right. |
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