by Gavin M.
I have been asked many times, "What kind of a trader are you?" It's a question to simple yet it takes a little bit more to answer. To those I simply have no time to spend I tell them this: "depends on what you're going for." What does that mean? Do you need $100 in the next few hours? Do you need $500 tomorrow or next week? Those are the kinds of questions you should be asking yourself to determine what kind of trading suits you.
I am primarily a daytrader. That is to say, I don't hold positions longer than 24-hours. I prefer instant gratification rather than wait for the trend to continue to take hold and make me money later. I can always join back in later. However, my kind of trading doesn't have to be your kind of trading. Just as I prefer to drive my Tundra doesn't mean you have to go all redneck and buy a truck. You might be a prius type of person. All I'm saying is your trading style is tied to your own personality and motivations.
The hardest thing to do as a market advisor is to provide ideas to clients for the immediate and medium term. Having a longer timeframe allows for more unforeseen circumstances to arise. If you are still surviving this low-volume market up to today, give yourself a pat on the back. This market is nowhere near its peak trading activity witnessed nearly 9 years ago where everyone wanted to be a daytrader.
The stock market is largely devoid of trading activity save for maybe a dozen or so stocks keeping it afloat. If you don't believe me, then you obviously are not an active trader. However, the absence of volume is not the same as the absence of volatility nor trading activity itself. It doesn't have to be. I'm no stranger to this low-volume environment and challenging as it may, it isn't impossible to trade. I pray that the time for when volume is close to zero never comes.
So going back to the topic at hand. When you ask others what kind of a trader they are. When you ask others whether they prefer short term or longer term, the answer always lies within your own goals. Some can't stand sitting in front of a computer screen for 4 hours a day. And yet, some, like myself, can be in front for almost the entire day without sleeping.
Some people make trading needlessly complicated because they want to cover all the bases and integrate as many techniques as possible. However, trading truly is as simple as asking yourself these two questions:
1. Do you want profits today or can you wait?
2. Do you have a plan for your trade?
Most of the time, when I see a trade setup, the time it takes for me to make up my mind and to press the Buy or Sell button is almost instantaneous. I don't try to overcomplicate everything with WHAT IF questions or AM I FORGETTING something questions. Trading is binary. Trading is about having a plan for an undertaking based on incomplete information. Some even say it is an act of faith.
The people who really struggle in this business are those who overthink and who hesitate. This Easter weekend, really think about how you view the markets. Think about how pointless overthinking something as manipulated as the markets. The majority want trading to be black and white but it is anything but that. Remember that the markets these days are now full of momentum-chasing robots. These are bots who could care less about fundamentals nor a sense of reality.
If you want further proof? Look at how the markets reacted to the bombings in Brussels. It took it right back up. So I say this in closing: why bother yourself overthinking a rigged market masquerading itself as a system actually based on economic merit? He who understands how the game is manipulated understands how to truly play the game.
Traders from Equity Sense will be writing on this blog on positions and other market-related things.