Being Successful in Trading by Not Trading

By | February 18, 2015

Being Successful in Trading by Not Trading –

“My philosophy has always been to stay out of the market as much as possible. The less time I am in the market, the less risk I am taking. If dictated by market conditions, I’d rather make X percent having significant market exposure in only three months of the year than make the same amount while being in the market all the time.” – Mark Minervini in Stock Market Wizards by Jack Schwager

I was rereading the book Stock Market Wizards recently and the above quote struck a chord with me. It goes against the general wisdom that the more you are in the market, the lower the time frame you trade, and the more trades you take, the higher your potential profits will be.

And yet, that quote has a lot of truth in it. That’s because in trading, opportunities are not distributed evenly over time: Sometimes the market offers more opportunity, while at other times it might take weeks or months before it offers tradable setups. This is true not only for stocks – the kind of market Minervini was talking about – but indeed in any other market.

As a consequence, the successful trader will vary his or her involvement in the markets: Sometimes trading actively and in size, and other times refraining from trading altogether. I believe that the ability to reduce or even stop trading activity for certain periods of time is an edge in itself because it helps traders hang on to their gains in times when the market is unsuited to their trading system.

As everyone is different, what this translates to in practice is that some traders, for instance, decrease trading when the market becomes very choppy while others when it starts trending strongly.

Continues here

15 thoughts on “Being Successful in Trading by Not Trading

  1. Deshawn Rosenquist

    magnificent publish, very informative. I ponder why the other experts of this sector do not realize this. You should proceed your writing. I’m sure, you have a huge readers’ base already!

    Reply
  2. leveraged affiliate Marketing

    This is the right blog for anyone who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want…HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!

    Reply
  3. spiritual dating

    I spent four years trying EVERYTHING in Online Dating, and through a huge amount of trial and error, I produced a system that I will share for you. This book will take you, step by step, through everything you need to know to double, triple or even quadruple the number of women you meet online.

    Reply
  4. filmes via torrent

    Nice post. I was checking continuously this blog and I am impressed! Very useful info particularly the last part 🙂 I care for such information a lot. I was looking for this particular info for a long time. Thank you and good luck.

    Reply
  5. this link

    Thanks for a marvelous posting! I quite enjoyed reading it, you might be a great author.I will ensure that I bookmark your blog and will come back down the road. I want to encourage that you continue your great writing, have a nice morning!

    Reply
  6. pinjaman mbsb

    I carry on listening to the reports talk about getting free online grant applications so I have been looking around for the most excellent site to get one. Could you advise me please, where could i find some?

    Reply
  7. Tech In Expert

    I think this is one of the most significant info for me. And i’m glad reading your article. But want to remark on some general things, The site style is wonderful, the articles is really nice : D. Good job, cheers

    Reply
  8. Arturo Mowder

    There are those who engage in this type of trading without sufficient knowledge; however, there are day traders who make a successful living despite, or perhaps because of, the risks.

    Reply
  9. The Almost Done

    Some really good info , Gladiola I noticed this. “Perfect valor is to behave, without witnesses, as one would act were all the world watching.” by La Rochefoucauld.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *