Con-tango

Timing the trade

First, we should not rush the trade; it’s far better to pay a little by coming in late, than to pull the trigger too soon, – there’s always another trade.

Once we’ve pulled the trigger, we should always remember Jesse Livermore’s advise, the underlying should soon begin to move in the expected direction; if it doesn’t, get out of Dodge real quick! I think what he meant to say is that if it doesn’t move or goes against us, then our plan is not working, something is amiss, then, act don’t think!

Once you’re in, consider that it’s always a risk, – the more time you stay in the market with an open position, the more risky it is; so, be sure to get paid for assuming that risk, if not, get out. Add a timing stop to your ordinary stop; something like: I have to be making so many ticks per minute, if not met, adios!

In the same venue, overtrading is a sign of poor methods of trade selection; staying in there too long is costly, are you getting the reward you deserve for spending all that time at risk?

Finally, if after entering your trades, they don’t move, or move against you, consider going back to the drawing board, it’s a sure sign you’re doing something wrong.

That’s all folks!