Sitting it out© Bob Tompkins
Aug 22, 2000
Slow Ride! It used to be that everyone would whine about the volatility in the market( when there really wasn't much). Now that so many people are trading in a more active manner, we look for volatility. We don't know how to trade without it. We have become so accustomed to looking for huge gaps and rumors and gang piles that we have forgotten how to trade off the fundamentals( yes it can be done). We have forgotten about risk arbitrage( trading both sides of a merger).
Traders have existed forever, long before electronic daytrading.There have always been speculators. Floor traders have always been able to play the scalp and the spread but the speculator of old had to have a trick bag of his own. In it he had knowledge of trading the fundies( core business issues). He had knowledge of macroeconomic variables and how they would affect the market. That in turn told them which sectors to play.
They also new that there was a time to sit it out.Sometimes you just can't trade successfully.Protect your capital and consider that your profit for the day.You can't force a trade or it will eat you. I should also say that if you find yourself sitting out more often than you are trading then there might be other issues. One, you need to learn more about your craft. They are more signals and tells thatn you can possibly learn and the more of them you know, the more you will find to trade. If that doesn't work, then you might have to face the fact that this game might not be for you. This week was a tough one to game if you were only capable of trading volatility and huge swings. If you are learning it was probably a good time to just hang.
Now on to this weeks sites. I only have a couple this week but they are pretty interesting. http://www.daytradingintl.com/ has a great stock screener and a good portfolio manager. The site also has some premium services including a trading room, daily picks and a newsletter. Give it a look. http://www.marketsigns.com/ is ugly but effective, and that ain't a bad thing. The site has hourly updates on too many diiferent things to list. It also has a tremendous number of updated indicators( oversold,200 day average,etc).I am not sure I have ever seen quite such a selection of variables on a free site. It is a killer and I will visit it everyday.
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The copyright of the article Sitting it out in Day Traders is owned by Bob Tompkins. Permission to republish Sitting it out in print or online must be granted by the author in writing.
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