They say “Timing is Everything,” and in trading this adage is exquisitely apropos.
How many times have you been in the right stock, option, future or currency pair only to have your position washed out before the market takes off in your predicted direction?
Isn’t it bizarre how the market seems to know exactly where our stops are… or how much doubt, boredom or pain we can tolerate as it takes us to the Uncle Point?
In fact in the zero sum markets such as futures and spot forex, (where there are no market makers) someone really is out to get you…the smaller retail trader. It’s no joke.
It seems like these markets try to convince us that we are wrong so we voluntarily close the position just before they would confirm that we were right.
Timing one’s entry is the #1 skill small traders with limited funds need to master. You can be right about everything else and if your entry timing is off, your trading will be much more stressful than it otherwise would be.
When it comes to timing errors there are two types of traders and they make two different types of errors.
If you are the Greed type, you will tend to get in too early. For these individuals, the perception of opportunity is so exciting that you will tend to impulsively hit the order execution button before the trade fully sets up.
On the other hand, if you are the Fear type, you will tend to get in too late because a trading opportunity generates a heightened sense of risk for you, so you feel more cautious and delay your entry until you have “confirmation.” By then it is too late.
Trader Rx: Greed appears to dominate the early bird trader, but behind the obvious greed you will usually find the fear of missing out. Consciously practice being late on every single trade.
Trader Rx: For the late comer, fear appears to control your behavior, but behind the obvious fear is a hidden sense of greed, which is your desire to hold on tight to what you already have. Loosen up and consciously practice being early on every single trade.
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