Timing your entry

I’ll admit to not actually knowing where the Azores were until after Mrs R. had booked the flights for our summer holiday. But a fortnight sitting on the mid-Atlantic fault line proved to be a lot of fun.

The highlight was swimming with dolphins. We were taken out in a speed boat into, well, it was the middle of the Atlantic Ocean, by impossibly good-looking marine biologist, Tim.

This was the point where their on-shore spotters (who stand on clifftops with military binoculars) had reported a sighting of dolphins.

Unfortunately for us, there were 5 bigger tourist boats already at the scene, all vying for the dolphins’ attentions.

But Tim was more than just great hair and great teeth … he knew to how to bide his time. We waited on the sidelines while the other boats circled the dolphins. Once they’d all left, the animals relaxed, started breaching the water and circling us, and we were able to get into the ocean and enjoy an amazing up-close encounter.

It’s a good lesson in patience, and waiting for the right moment rather than trying to force uncontrollable events to fit with your own agenda.

Timing your entry

A lot of trading is about sitting on the sidelines waiting for the perfect moment to act. It takes patience and discipline.

But trading is also about ensuring you’re in the right place and ready to act when the moment is right.

All that sitting on our hands shouldn’t be confused with inaction – because successful traders are poised to grab things with both hands when the moment is right.

The trading mentality

Some of us are naturally more patient than others, and some of us are more gung ho.

Many traders I talk to have decided to take this route to financial reward because they are the kinds of people who don’t sit and wait for things to fall into their laps.

Instead, traders tend to be people who make things happen.

It’s an admirable character trait. It’s what sets traders apart from people who stick their money in a savings account.

But it can work against us when it comes to individual trades.

If you’re naturally a ‘grab it with both hands’ kind of person, you’re going to struggle with waiting for the perfect set-up rather than just clicking ‘buy now’.

If you’ve ever opened up your account and gone cruising through various markets (that you wouldn’t normally consider) looking for any kind of set-up … you’ll know what I mean.

These are the times we pick our worst trades … the ones that don’t strictly match our entry criteria or are in markets we’re not familiar enough with or ones with high spread costs.

And these are exactly the trades that we should be cutting out.

Of course, some people are naturally more cautious

These people don’t find it so difficult to watch and wait.

But when we get used to sitting on our hands, it’s easy to become over-cautious or slow to act.

But this kind of sitting on the sidelines isn’t a passive activity – we need to be ready to act decisively when the conditions are right.

It’s one of the many contradictions that traders have to master – sitting on our hands and waiting for the profits to come to us … and being able to dive in and snatch at those profits when the moment is right.

The easiest way to master this is to have strict rules which tell us exactly when to sit out, and when to grab profit opportunities with both hands, which is why rules-based methods have to be the cornerstone of all your trading.
 

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