Some people meticulously prepare and perfectly execute a mountain ascent, catching the significance of both the experience and the view from the top. Others just catch a cold. Last week’s blog produced a record number of comments which made it clear to me that I should amplify and elaborate more on “the experience” I hoped all readers gleaned. I’d like to suggest that you re-read that blog before you delve into this one.
As I said last week, the best traders make it look easy. Somehow, they manage to squeeze 28 hours out of any normal day. One of the secret ways they do that is by devising routines, perfecting those routines and then following them. They operate like a NASCAR pit crew. Anyone who’s witnessed firsthand the awesome efficiency and speed of a professional pit crew as they execute their routines can attest to both their thoroughness and their efficiency. It’s a carefully choreographed and much practiced series of to-dos. Contrast that to John Q. Public who procrastinates and often forgets to check his oil, tire pressure and fuel levels. How long does it take him to execute his “pit stop”?!
My first point is that as a trader, you, too, are in a competition and you must learn to practice diligently as you fine-tune your own pit stop. The second point is that you must design and choreograph your pit stop routines to reflect the time parameters and constraints of your existing day – not the dreamy wishful day you’d like to have but the brutally honest reality of the day you live.
Last week’s blog talked about the importance of assembling and organizing chartlists. This becomes a key element of your pit crew’s roadmap and optimizes whatever time you have available. Those of you who’ve participated in my Tensile Trading seminar appreciate the power of carefully orchestrated chartlists.
Now for one of my hot buttons. Last week I wrote about my focus on price and volume action as part of my morning routine. This remark is addressed not just for my readers but for some of my close friends who are extraordinary traders. There are professional and part-time investors out there who claim that “it’s all reflected in the price action”. Poppy cock! By failing to incorporate thorough volume analysis into their review of price charts, they are essentially trying to tell time using a one-handed clock. They might get close to the correct time, but I’ll be more accurate 100% of the time because my clock has both a small hand (price) and a big hand (volume). Case closed.
Lastly, I’d like to touch upon the numerous challenges presented by readers questioning why I have two offices and how I can afford to abandon my market screens in the middle of the day as I drive to my downtown one. I’ll address the later first. Over all the years I’ve traded the markets, I’ve come to believe that when the big players go to lunch in New York, the smaller market makers use this window as an opportunity to manipulate the markets. While I’m driving to my office, the volatility often increases and price ranges expand, but it’s often on low volume. Ask yourselves this: how often have your stops been hit when it’s lunchtime in NYC? Having said that, my car has real-time stock prices streaming to its nav-screen and I do have a hands-free cell phone available in case there is a need for an emergency trade.
With respect to the former question about my rationale for dual offices, my answer is twofold. By now, most of you have read my sermons on the immensely important role played by the investor self. I can train most reasonable investors to become very competent in the mechanics, tools and routines necessary to become a profitable trader. It’s the individual discipline that’s required, along with one’s ability to address his or her personal trading foibles that always present the greatest challenges. It’s no different for myself. By physically relocating myself to a professional office building – and consciously slipping into my trader’s vest – I transition smoothly into my trading persona. This persona empowers me with the appropriate trader’s mental frame of mind. I’ve painstakingly cultivated those particular personality attributes that I’ve learned are necessary to succeed in the markets.
On occasions, good friends will phone me during market hours and ask that I take off my trader’s vest so they can speak to me about social or family issues. In the case of the stock market, it always helps to have a dual personality! The other reason for my remote office is that I keep my trading files, books and binders out of the house. The office is setup like a war room, with bulletin boards all around me and charts of interest tacked to them. I write my trading journal as honestly as I can in the quiet privacy of my office and keep it there as well. It’s a trader’s version of the “man cave” and it works for me. You need to give this serious consideration and find a cave space that works best for you, too.
I’m grateful to my readers for your many thoughtful comments. I read them all as they so often provide the catalyst for future blogs. Next week, I will continue describing the timeline of my trading day.
Trade well; trade with discipline!
-- Gatis Roze