Category: Commentary

Spring was hectic. This year I was School Site Council Chair, PTA Secretary, and a GATE parent volunteer. I managed to teach 2 classes at the art college. The big kids eeked out 2 activites each over the course of 3 months. The baby started school for the very first time complete with her first extracurricular activity too. Hubby and I did a high five after the last ballet recital. The school year is officially over! So happy for the kids because it has been a great year. Lots of growth in us this year.

I say all that because it’s no surprise that this hectic schedule has forced me to trade slow. Slow and deliberate. More so than I ever have. And I found that there is a peace in not rushing trades. Trades are now limit orders triggered by my rules. And once set, I am free to watch the market however I choose: at my computer, in a meeting, during the boy’s basketball practice or the girl’s art class.

The high-energy of active day trading has very little appeal anymore. Instead, checking price becomes a check on the chart rather than a check on my trades. That subtly in grammar is also the subtly in psychology that has really helped my trading. The chart is a 3rd person. My trade is very personal and very 1st person. Personal matters tend to be emotional whereas we can all can detach from a 3rd party’s issues because they are not our own. As a trader, markets work when it becomes less about me and more about it.

The timing of my slower trading is not lost on me. The kids are back home full time. The whirlwind of winding up a school year is one I more appreciate now as a teacher and parent than when I was a student. The seasons have changed and, quite naturally, my trading changed with it. Trading is certainly a marathon, not a sprint. If you are in it for the quick thrills you probably can’t stay at it long enough to truly be rewarded. The longer I do this the more I understand that. Now I have entered a season in which I am truly living that out.

TRADE SLOW — my new mantra.

Too many people say “I was too early on that one” to reassure themselves that they were right after all. The bottom line, though, is: if you didn’t make money, you weren’t right. So stop lying to yourself and work on your timing!

Great read over at Richard Todd’s blog on timing. Timing is something I strive to improve upon every time I’m in the market. I realized early in my trading that the entry of a trade is just as important as the exit. I personally feel it is more important. Todd’s post got me thinking about what it is I do to improve the timing in my trading.

1. Use tighter stops. This is a recent change I made about a year ago. I know it is very counterintuitive and even ill-advised. But tight stops don’t allow you to be lazy when entering markets. There can’t be any “Oh I’ll just get in right here.” There must be a reason for every trade and that reason is your price. A trade is triggered because price has reacted a certain way at a specific chart level. It is at that level where we would love to get in at. It is the level that will maximize our profitability. An early entry is too impatient. Impatience is never a good way to trade. A late entry is a missed entry. Missed trades simply don’t pay which can be okay but refer to the above quote.
2. Use limit orders. Trading live in the market can be exhilarating and boring. Both environments have positives and negatives but they have one thing in common. They both affect timing. In a volatile market, some traders get an itchy finger pulling triggers as fast as the market can oscillate. In a slow market, impatience rears as a trader enters a trade just to trade. Using orders allows me to time my entries to a certain extent as I let the market come to me. If the market never comes to me, then it’s time for a new setup and a new trade. With capital preserved, I can go into that next trade with a clear head.
3. Using profit targets. There is aplethora of literature out there about using stops. Far less is dedicated to using limit orders to set profit targets. Many traders will place a stop but never set a profit target. Without a hard profit target set, the trader may be away from the screens when the market finally does move in her direction. Or worse, the trader hesitates, or simply refuses, to take profits off the table. Use hard (tight) stops. And use hard targets.

Todd says timing is everything. I agree, and take it further. Timing is the only thing.

Source: Timing Is Everything (blog.richardtodd.name)