What to do with a quiet day in the market
Hint: don’t force a trade
This might be the most useful skill in trading:
Patience.
Before you roll your eyes and move on, think about it for a minute.
By its very nature, the stock market is always threatening to drag your emotions in. The charts themselves are really just a historical record of the emotional decisions that people make.
After all, EVERY decision a person makes is emotional.
I remember hearing about some big psychological study they did with people who had some brain accident and they lost the ability to feel emotions. The surprising conclusion was how little they could function.
They couldn’t pick out a color of shirt to wear.
They had trouble knowing what to eat.
They could not make decisions because they had no emotions to drive them.
Fascinating (and tragic, for them).
One of my stock trading mentors, John F. Carter, once called the markets an “equal opportunity dream killer.”
That one has stuck with me because I’ve seen it happily destroy my own dreams — as well as the dreams of many a wall street hedge fund. (Remember the GameStop short squeeze put on by the Reddit r/wallstreetbets fellows? Dream killer.)
So, how does a professional trader navigate these shark infested waters?
What kind of skillset does it take to endure?
Ah ... you probably guessed it:
Patience.
The patience to wait for an optimal entry point — instead of hitching yourself to the bandwagon and hoping to ride the rocketship to the moon!
Or...
The patience to hold on to a long-term trade even when it looks like there’s no hope left and it’s time to just throw in the towel and move on to the next one.
(That one is tricky because there are actually times when there is, in fact, no hope left and getting out is the right move. But, again, building that skillset takes patience by spending time in the markets, doing research, and discovering when these times might be here.)
For better or worse, I’ve had to accept patience in my own trading.
In fact, I’ve made it a core part of my trading system.
For instance, my targets for my account is merely 1.5% per week.
A far cry from the outsized gains that most Options traders talk about. The way I trade — patiently — means I will almost never see one-time gains of 20%, or 50%, or 200%, or 400%, or whatever. Nope. I just chip away at the markets, collecting my 1.5% and moving on with my day.
Because I know that given enough time, those kinds of consistent returns will compound.
1.5% per week compounds to over 100% per year.
And if I can double my account value every year, then it doesn’t take that many years (about 5 to 7) before I find myself financially free.
(And I’m doing this is my after-tax Roth account!)
I’ve bundled my own trading system into a course I share with those who join my community.
If you’ve got the patience, you can start a free 7-day trial here:
» Trading EmpIRA (course & community) «
— Ricky Ketchum