How many times have you found yourself regretting after exiting on a fresh bear or bull market? How many times have you closed that trade which ended up moving 10 times the size of your stop loss. Okay that’s a lot. What about how many times have you found yourself chasing that market and trying to time the best opportunities? That famous phrase “I am trying to catch the Tops and Bottoms” has mislead hundreds of traders in the industry especially retail traders. Traders now are spending time trying to TIME the market buying on every deep only to find the market is forming new structure lows.
Now i am not saying that trying to catch the tops and bottoms is impossible but its hard especially if you are a day trader since the markets turns happens few times in years. So when i see day traders struggling to catch tops or bottoms on a daily basis, Its just a waste of time and resources. Odds that you are going be correct is 5 out 100 and the 5 are probably not the actual turn around.
If you focus mainly on timing the market its true that you are going to observe a drastic fall in performance of your trading. Just like a fish, the head and tail has more bones than the body. What do i mean? Once the market has start trending either up or down, The easiest part to make money is to jump on the trend and hold on. Here comes my point of TIME IN the market. It takes too much energy to figure out the market turns. Lot’s of traders take big hits on the process but if you are smart enough to wait for the turns to happen its important to buy low and not buying at the bottom. “BUY LOW SELL HIGH” quote has great sense but most traders have misinterpreted it. Once you buy its time to swing and hold since the psychology of the participants is that price will continue to rise. Here volume starts to pile up and volatility kicks in. This is the easiest way to profit from the market instead of figuring the tops or bottoms. Act smart.
That’s all for today, Lesson here is to focus on how long do you hold a winning trade rather than how much time to spend trying to catch the TOPS and BOTTOMS.
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