Nov
20
2009

  Trading Distractions

For the first time since I started on the 2-hour per morning schedule, I'm having a hard time concentrating on my charts. It started yesterday, I placed some out-of-the-money orders, and as the day progressed found myself not caring if they executed, even though my patterns would probably be indicating a buy at the close. One of the three orders did execute, but if I was on my game I probably would have gone back to my screens at the close and adjusted the other orders to get long on those positions.

But, if you're not "feeling" the trade, it IS better to sit it out than to have to trade a risky position when you're out of sorts. So I'm completely comfortable with the outcome, but still, I feel it's worth noting that I'm a little less motivated toward the end of this week here.

I am undecided what I'll do about it. I will either take it easy today, just chart a little bit but mostly chill out and play facebook games or something. Or maybe switch and do some cash management, try to find higher-yielding bank accounts and move money around or something. Maybe update my trading journal, or get a head start organizing data for 2009 taxes. I think part of the problem is that I'm just tired of this rally. It's obviously nearing the top, but "nearing the top" is relative. It's been going on since March, with a correction in July, so it still might not top out for another month. There is a decent chance it'll still be climbing at the end of this year. So even though the rally is weak, and trading on small volume (indicative of dumb money*), as long as the price is going up it's not a great time to get in long, nor is it quite time to get in short (except in anticipation of short (about 1 week) corrections, which I am doing). So it's a trying time to be a trend-trader. Lots of smart money is either sitting out or like me, playing with tight stops. So I might just go with my feelings, and fill my time with some other useful activity instead of waiting for the market which could take weeks to come around for me.

*dumb money refers to individual investors-- here's a short article from Slate about the phenomenon.