I’ve said many times over the years that one of the key parts of my edge is an ability to sit on the sidelines and WAIT for more favourable market conditions.

Patience!

If you think about it, you might expect to take tens of thousands of trades over the next few decades. So if the market offers nothing but crap right now, you can probably afford to sit and wait.

The next half hour is meaningless from this perspective. As is the next hour. And in fact the whole next day. If there is no edge, let it go.

I get that everyone gets excited by their good trades. And they should. But I also want you to be able to look back at chart sequences where there were no trades and be impressed with your performance and decision making.

“No trades here… that is damn good decision making! Nicely done.”

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

(Side note: There was a point in here where a sideways structure was confirmed. And a point where I was tempted to seek an entry short but I passed as it lacked sufficient conviction. Look to last week’s article, as it’s a similar situation, and see if you can identify the potential short.)

<image: Confidently Sitting on a Loss>

<image: Confidently Sitting on a Loss>

Let me repeat a key point from earlier in the article:

I get that everyone gets excited by their good trades. And they should. But I also want you to be able to look back at chart sequences where there were no trades and be impressed with your performance and decision making.

“No trades here… that is damn good decision making! Nicely done.”

<image: Confidently Sitting on a Loss>

The comeback from a session drawdown does not just rely upon me finding good trades.

It also requires that I avoid bad trades.

So when I start the session off with a losing sequence and I have no real conviction in my market read, I will confidently sit on that loss for as long as necessary. Half an hour, an hour, the next day. Whatever is necessary.

When clarity returns. When the market makes sense. When you can see the projection forward with great conviction and assess edge in the market, THAT is the time for decisive action.

Not before.

Happy trading (and standing aside during difficult market sequences),

Lance Beggs


Similar Posts

Leave a Reply

Your email address will not be published.