Excerpt from: Day trading newsletter Issue No. 001
From: Timothy
Hi Christopher,
I was just wondering how you think the market will evolve now.
~~~Christopher's Response~~~
Tim,
It really does not matter to a trader which way the market moves,
as long as it presents opportunity.
Now, I realize that you may have other interests at heart other than
trading, but let me clarify what I mean. I usually try to provide some
kind of guidance whenever I am asked my opinion on the near term
direction of the market. I know this can appear helpful to people,
so I often try to give them an answer that they can take to heart,
but trust me, I am not doing anyone a favor by giving my opinion.
Experienced traders and investors realize that their opinion is worth
little in the "big picture". The most successful traders simply watch
the market and their target stocks and monitor their behavior closely
before taking action. They take this action with no preconception of
what the market or their stock is going to do, they are simply playing
the odds that are in their favor at the moment and then they are managing
their trades once they take them.
This is not to say that good traders don't have an opinion or that they
are not confident about the trades they initiate. Far from it,
experienced traders are very confident when they initiate a trade,
but my point here is more about how they view things day to day.
Good traders take each day as it comes and they act according to
how they view things at that very moment. They do not allow current
consensus to influence their trades nor do they allow any bias to
enter their "zone" as they trade. They simply examine, execute and manage.
Navy Seals and other special force soldiers are the best examples
(outside of the market)of the type of focus and precision that I am
referring to if that helps you picture it. In fact, the best traders
are similar to snipers. They lay low, exhibit extreme patience and
perseverance and they only strike when the environment is conducive
to the desired outcome. Should a trade go against an experienced
trader however, they do not hesitate for a minute to exit the trade
at their predetermined stop and then clear their mind of the entire
ordeal so that they are back "in the zone" for the next opportunity.
It is only with this focus and non-emotional attachment and lack of
opinion/bias that a trader can execute with precision his/her campaign
to extract profits from other traders. That, after all, is where
profits come from.