Sitting on one's hands

C

candletrader

My Dearest Trading Brethren,

Trading is a battle with oneself... contingent on one's trading strategy, sitting on one's hands (i.e. staying in cash) may be an integral part of one's strategy for long-term capital preservation, in a less forgiving market environment...

Sitting on my hands is becoming much more common for me these days, since my trading strategies are failing to identify too many high probability set-ups (this is not to say that set-ups don't exist - of course they do - but each market participant has a different personality and a different set of strategies built upon that personality)...

The tragedy is that only the relatively experienced (i.e. those that have endured a plethora of market environments) know when the time is right for them to sit on their hands... the neophyte starting with minimal capital will not have sufficient experience to discern the appropriate time to stay in cash... the success or otherwise of the neophyte is therefore, to a significant extent, determined by how forgiving the market environment is in his initiation to the practice of daytrading...

I have been sitting on my hands a lot lately and it is starting to make me question the viability of trading as an income earner (yes sitting on one's hands preserves capital, but if incremental capital is hard to generate, then an interest-bearing account would do better)... but light may be at the end of the proverbial tunnel... the rally from last Wednesday was followed by two depressing down days... however yesterday was the beginning (I hope) of something more constructive for those whose strategies have greater efficacy on the long side...

Just my 2 cents, and my shared thoughts...

As ever, and with sincere love of the fraternal genre in equal measure for you all...

Your Brother,
Candle
 
Why don't you explore trading other markets such as treasury futures or currencies? If you are a technical trader it should be an easy transition to make. These products are highly liquid and can be traded on various timeframes (intraday to weekly).

Regarding the current stockmarket, I would describe conditions as "normal". Perhaps the people who are struggling are trying to use strategies that are only viable in a raging bull market.
 
Originally posted by zentrader
Perhaps the people who are struggling are trying to use strategies that are only viable in a raging bull market.
More...

Dearest Brother Zentrader,

No, my strategies don't rely on a raging bullmarket... but their efficacy is less than optimal in a generalised downtrend... the issue is not about losing capital for me, it is about non-productive capital, as a result of the minimal number of opportunities which fit my strategies... the strategies are tried and trusted and I am comfortable with them... I suppose its about simply sitting in cash through mind-numbingly boring days until optimal conditions arise... my intraday trade rate has gone down from 4-5 a day to 1-2 (and sometimes none), with a corresponding decrease in aggregate net profitability...

Love,
Candle
 
Originally posted by candletrader
My Dearest Trading Brethren,

Trading is a battle with oneself... contingent on one's trading strategy, sitting on one's hands (i.e. staying in cash) may be an integral part of one's strategy for long-term capital preservation, in a less forgiving market environment...

Sitting on my hands is becoming much more common for me these days, since my trading strategies are failing to identify too many high probability set-ups (this is not to say that set-ups don't exist - of course they do - but each market participant has a different personality and a different set of strategies built upon that personality)...

The tragedy is that only the relatively experienced (i.e. those that have endured a plethora of market environments) know when the time is right for them to sit on their hands... the neophyte starting with minimal capital will not have sufficient experience to discern the appropriate time to stay in cash... the success or otherwise of the neophyte is therefore, to a significant extent, determined by how forgiving the market environment is in his initiation to the practice of daytrading...

I have been sitting on my hands a lot lately and it is starting to make me question the viability of trading as an income earner (yes sitting on one's hands preserves capital, but if incremental capital is hard to generate, then an interest-bearing account would do better)... but light may be at the end of the proverbial tunnel... the rally from last Wednesday was followed by two depressing down days... however yesterday was the beginning (I hope) of something more constructive for those whose strategies have greater efficacy on the long side...

Just my 2 cents, and my shared thoughts...

As ever, and with sincere love of the fraternal genre in equal measure for you all...

Your Brother,
Candle
More...

Hey "brother" (_groan_)

Hast thou considered changing thy trading strategy to accommodate thy desire for a greater income?

To me, a trader who's success is contigent upon the "correct" market environment = crap trader. What exactly are "forgiving market conditions"?? Are you referring to the days when one could say, "oh..I bought XYZ on a hunch, i know I shouldn't have...but hey ...look...it's up anyway" ?

Yep, trading sure is losing its viability as an income producer...I mean 2-4 point ranges...geez, who can do anything with that...DOH! :eek:

What about this doozy, "..two depressing down days.." HAH! What was so depressing about them? I found them just as good as the previous up day.


Keep thy .02 brother, thou may need it yet.
 
Originally posted by daniel_m


Hey "brother" (_groan_)

Hast thou considered changing thy trading strategy to accommodate thy desire for a greater income?

To me, a trader who's success is contigent upon the "correct" market environment = crap trader. What exactly are "forgiving market conditions"?? Are you referring to the days when one could say, "oh..I bought XYZ on a hunch, i know I shouldn't have...but hey ...look...it's up anyway" ?

Yep, trading sure is losing its viability as an income producer...I mean 2-4 point ranges...geez, who can do anything with that...DOH! :eek:

What about this doozy, "..two depressing down days.." HAH! What was so depressing about them? I found them just as good as the previous up day.


Keep thy .02 brother, thou may need it yet.
More...

Dearest Brother Daniel_M,

It is with pleasure that I read your reply. I am an old dog, and it is difficult to teach an old dog new tricks... I concede that adaptability is a good trait to have... I lack it... I have relied on a handful of strategies for the last few years, and I fear that I will rely on them for the next few years, in my humble attempt to make a living...

With the love that can only be felt amongst the Fraternity of Trading Brethren,
Candle
 
I have distinct feeling, Candle, that you are not very comfortable shorting the bear market.

If so, wouldn’t that be contradictory to many of the basic trading principles regarding the trend? :confused:

Hope that things work out for you.
:)
 
Originally posted by Miki
I have distinct feeling, Candle, that you are not very comfortable shorting the bear market.

If so, wouldn’t that be contradictory to many of the basic trading principles regarding the trend? :confused:

Hope that things work out for you.
:)
More...

Dearest Brother Miki,

Agreed. However I do still make money on bearish days. However, I do concede that it makes sense to be the same side as the trend; but there is usually a number of long side opportunities. Admittedly, if the market is extremely red, I would try and find something to short...

Love,
Candle
 
Nice, strong retail figures (just out a few minutes ago) could finally send the market up... just when I was getting ready to top myself, the consumer saves me...
 
"Offense is for times of sufficient strength, defense for times of insufficient strength" ~Sun Tzu~

Brother Candle,

It was only until recently with my switch over to the futures arena that I came to TRULY appreciate the art of defense...

My advice to you would be to REALLY know your edge and have the will, patience, and discipline to sit on your hands when it is not present...

Remember the art of defense is in turn the art of offense...

PEACE and good trading,
Commisso
 
Dearest brother Candle,

It is with great worry that I see a brother begin to question the viability of his career in trading.

I see from your last post that the retail situation has sparked new interest and the expectation that there may be plays for your setups in this sector.

Brother, you say you are an old dog and cannot learn new tricks. However, knowing the little that I know about you from your posts, I believe that perhaps you are willing to learn if the teacher is one you have deep respect for.

I will say this brother - our departed brother Hitman trades in a similar vein, that is, he seems to be able to find _LONG_ setups regardless of the "market." If you think about it brother, there will always be a sector or two that _MUST_ be moving to the upside - in the current maket environment, funds etc are doing quite a bit of sector rotation to strengthen their defense - just gotta know how to spot the footprint.

I for one hope the Candletrader does not turn into the Candlemaker.

nitro
 
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