Monday, June 1, 2015

Summer Hours!

I don't know about you, but for me summer means a substantial cut back in screen time. The kids are out of school, the weather is hot, and in turn I am much less inclined to spend long hours with the market. I love the market, but I love my family more :)

So I thought I would lay out my summer plans. I know clients will appreciate it — but it also may inspire other traders reading this to implement their own "summer hours". 

The whole idea is to spend less time behind the screens. Here is the guide I plan to follow this summer:
  1. 1 or 2 main ideas for the instruments I want to trade.
  2. Focused. Come to trade, then quit. 
  3. Take the setups I see in the 3 1/2 hours max I am in the Zone.
  4. Take quick 2-3 min breaks to re-focus and re-charge. Meditation/Yoga/Exercise.
  5. Pull the trigger on the good setups. Stand down on the impulse trades. Know the difference*.
  6. Be present. Trade what is happening now vs. what is likely to happen next. 
  7. Consider using limit OCO's to potentially capture moves when away from the markets.* 
I put astericks next to 5 and 7 because there is an important distinction I want to make about each, but I will quickly elaborate on every point in the guide as well.

1. This is self-explanatory. What are my top 1-2 trade ideas for each instrument? Focus on trading those top ideas. 

2. Don't be distracted doing anything else during the 3 1/2 hours I plan to trade. I qualify this by saying during the time I am stalking new executions. Once positioned, and especially once some risk is scaled, I don't find it necessary to monitor every tick. Therefore # 2 speaks directly to the time when I am stalking new executions = no distractions. 

3. I don't really have a problem pulling the trigger so this has more to do with # 2 (not being distracted so executions aren't missed). A lot of trading is waiting but there is nothing worse then waiting 40 min for something to develop and then missing that something because you were distracted. 

4. This is self-explanatory as well. Have you tried this? I challenge any reader to actually do this on a consistent basis and report back how your focus/trading has improved. I know it will. 

5. The "know the difference" part is again about being aware and being present. Inherently deep down we know what a valid trade setup is and what an impulse trade is, so knowing "what" they are is not so much the issue as consistently avoiding the impulse and consistently taking the valid. I find it helps to talk to myself. (Who was it that said: "I talk to myself sometimes, especially when I need an expert opinion". Anyway, having a dialogue with yourself can help. Try talking yourself through the next trade set up. Out loud. 

6. This is again about being present. 

7. I used to use a lot of limit OCO's so this is not something new. In recent years I have gotten away from them mainly due to the fact that I want to be present during my executions in order to factor in other components besides price for my entry. Specifically, market context. When entering using limit OCO's we are basing our entry using price as the only factor. Essentially saying if price gets here I am buying or if price gets here I am selling. While we can set our stops, targets, risk reductions all ahead of time to work on auto pilot, which is great, it still only allows us to factor in price alone as the entry parameter. Anyway that being said — there is still a place for limit OCO's because sometimes for me price is the only variable used in determining entry. If a trade like that is setting up, maybe overnight during Europe or after I am done for the morning, I will use limit OCO's to enter new positions. 

As long time readers know there are really 2 best times to trade and I plan to execute during the morning session.

Hope these "summer hours" inspire you to design a plan for your own summer trading!

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