(And How You Run Your Race)
The markets provide an endless stream of possibilities for taking a trade. On one hand, this is great. But on the other, it means that impatience can sometimes get the better of us. So it’s always good when markets remind us that it’s not always the best tactic to hammer away at them irrespective of what’s going on – having patience and finding the best trading opportunities will help to give you a fighting chance of success.
Instant Gratification
The modern world is all about what you can get now, and I feel that this sometimes seeps into a trader’s behavior.
Take too many trades when conditions are less than ideal and you may find that when conditions do improve, it’s impossible to fully make up for earlier losses.
In reality, movement is just movement. What a market does is generally not good or bad, so it has to be about how a trader interprets and reacts to the information the market gives them.
“Not All Market Movement Is Good Movement For All Traders”
The problem with reacting to just any old swing in a market, is that it does not necessarily give you enough information to tell you that the odds of a successful trade are favorable.
Contextual Boulders
The key to this is really all about context. Context, for those who are unfamiliar with precisely what I am talking about, is about what the market does relative to what is has already done. This means we have to have some way of standardizing what it is that we look at to get a better understanding of key elements to the auction.
There’s going to be a timeframe sweet spot to find these key contextual elements in for traders of different time horizons. The average day trader for example, would do well to assess their markets on a 15min, 60min and a daily periodicity.
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