I’ve spent the past week recharging my batteries on a family vacation in Rocky Mountain National Park (Colorado). I’ve snuck in a few trades and worked on the website, but other than that it’s been great to just spend time with the family and enjoy the beautiful scenery.
I was inspired to write this short post by two events: my vacation and the BREXIT vote. An interesting combination, but both can lead to ill-advised trades. So I quickly wanted to elaborate on that.
Note that if you are a long-term investor, this type of post likely isn’t for you.
As traders, our success is defined by our plan, time-frame, and discipline. And vacation and “events” can cause unnecessary harm to our P & L’s. Yes, trading can be a bloodsport. And it’s not to be underestimated.
Our biggest losses usually start innocently enough. For me, it usually starts with an attempt to make a quick buck (short time-frame), only to see my discipline slide as I add to the position waiting for a bounce to break even. We’ve all been there. It’s incredibly important to realize that “quick” trades require strict discipline that aligns with your plan and time-frame. Because trading is in our blood, “Vacation” often breeds these types of trades. Careful.
“Events” are just as bad for traders. They tend to bring out our animal instincts and fear of missing out (FOMO). One thing that I’ve gotten pretty good at is avoiding events. In terms of performance, we have an entire year to make money and find good setups. There will always be a good setup… and they often come out of (i.e. after) the event. Watch your levels.
Trading is. Remember that it’s easy to lose an entire winning streak with one bad loss.
Thanks for reading and good luck out there.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.