Tough time to swing trade

Posted by downtowntrader | 9/30/2008 09:15:00 PM | 0 comments »

The past week and a half has been a tricky time to swing trade (at least for my style) as we are getting huge reversal moves every other day. I place a lot of emphasis on average true range for my stops and targets and it seems like the increased volatility is whipping stuff around. This is an easy problem to solve as a trader, as I just take less trades, tighten my targets, and wait for the odds to stack up in my favor. However, as a blogger who likes to post charts of potential trades I may take, it has been really tough get behind any charts lately. While this may make for slow blogging, I don't want to mislead any readers into over trading right now. As a trader it's very important to be cognizant of what market conditions make it difficult to execute your edge and then have the discipline to not trade during these conditions. The current environment is actually pretty good for scalpers and certain types of daytrading, so those types of traders should be doing the opposite and trading as often as there edge allows. There are really only a few lessons traders need to learn to be successful at trading, and learning when to sit on your hands is one of them. Cash is a viable position and you don't have to be in every move. It took me a while to learn that lesson, but it has paid off during the recent whipsaws, both in my bottom line and my sanity.

Good Trading,