My last post was on time and how it changes your profit and losses and the way you trade. This changes constantly throughout a traders year. However, another evil I often battled in my trading journey and still today is timing.
A bored trader is often a broke trader. We all do it. As I am typing this, I have open options that I bought today at a random time, not support or resistance, while bored and wanted to gamble. This mindset/problem causes a lot of losses, even if it’s a few contracts at a time. I used to do this with much heavier positions, but I have learned to feed it by only buying a few contracts or only 50 shares or whatever it is with tighter stop losses set. Doing this reduced my losses. I also have been working on slowing down on the larger plays and trying to take breaks. Not scalping a big play every day or trying to roll to higher options, which most people lose money doing. Stick with your original position. Refreshes are needed as you don’t want to overtrade. Cash positions are ok.
Bad timing also means bad entry points on a stock, shares or options. Each stock our community finds that has multiple day run ups often has someone calling out the DD and good entry points early on. When people initially miss it, FOMO kicks in or you hear just buy it whenever it doesn’t matter from random people online, although our community highly discourages it. I now live by, it always matters when I enter a position. I always try to look for hourly/daily/weekly/monthly/yearly support to make a buy vs fomo or bored buying. Sometimes this means waiting days or a week to enter for a scalp or swing trade. A recent play example is almost stress free when you have contracts that cost .45 vs current value of $3 per contract. When it knifed the other day, people were still about 200% to 500% still in the green. That is huge. A stock knifes and people go meh, buying the dip or not loosing sleep. We have seen this issue on many ramp ups. I know some will always have a higher entry or lower entry and that will change how you react to a drop or dip. I now will not even play some if I didn’t get in early like others. Timing takes away stress, massively reduces risk and losses, and slows you down to better manage the trade.
Also, often times if you are asking if it’s too late to enter, it probably is or at the very least much riskier. It is also ok to ask because sometimes we all need another voice that isn’t ours to say yes dummy it’s too late. We all should save each other money and even just a yes it is can do that for someone.
When you try to time the peaks for max profit, you will often miss them. Some are very good at selling when green candles after a quick run shows weakness, others sell at the first sign of a red candle, and some hold and see all the gains go away because they didn’t have a plan to exit or to cover cost basis. Timing is one of the most important things in trading and that goes for scalping, swing trading, or going long. Patience is a bitch isn’t it.
Wanted to get this started like others and will try and come back and add to it and make edits.
TL;DR timing for your entry on a trade effects how you trade, reduces stress and losses, and battles fomo. A bored trader is a broke trader.