Patience and Liquidity

 

Date: 9/9/2022
Author: Chris Hood

 

 


These are trying times for those with money in the market.

My guess is that every time you look at your portfolio, it makes you a bit uneasy. Almost everything is down, and we have no idea where the bottom might be.

We’ve been making quite a bit of cash in my live trade room, but we’re keeping the trades quick.

Usually in and out on the same day.

There’s just too much volatility for me to make many long-term plays.

Each trader has a different tolerance for risk, and I’m incredibly risk-averse. So I’m keeping my positions small and my cash balance high.

I know I’m going to lose on some trades; I just don’t want to lose very much.

Cash is a riskless position.

I recommend just sitting tight for all the retail traders out there who aren’t doing well on the short trades or those who keep getting smashed by the quick reversal rallies.

Learn the virtue of patience.

It’s something I constantly remind my subscribers about. Let me tell you why.


 


If you don’t have the trade set-up you want, or the conditions have you spooked, there’s nothing wrong with just passing your turn.

Remember this.

Being a trader doesn’t mean you have to trade every day. It doesn’t even mean you have to trade every week.

It means you trade according to your indicators and rules when the situation is correct.

Professional baseball players don’t swing at every pitch. Instead, they find the one they feel is likely to get at least a base hit.

Then they nail it.

When you’re tempted to force a trade – or throw money at a questionable idea – ask yourself the following question.

Does this set-up meet my entry guidelines?

If the answer is no, then stop. Don’t make the trade.

The same goes for those trades where you have to think hard and only muster a “well, sort of.”

Chances are, you’re about to open a position for one of three reasons.

You’re trying to get rich quick, you’re bored, or you want revenge on the market for some recent losses.

I know this from personal experience. And let me tell you, all of those will get you slaughtered.

When the market isn’t to your liking, maintain your cash balance and wait. Practice patience or be prepared to learn some harsh and expensive lessons.

With your money tied up in poor trades, you won’t be able to take advantage of the incredible opportunities that will pop up when the tides turn bullish again.

Cheers,
Chris Hood

 

P.S. – Keep an eye out for your opportunity to join our live trading – it’s coming soon.

 


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