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I think the volatility creates more work, more risk and more stress. The
only market I day trade is the S&P and I want to just keep taking out modest
chunks of 4-6 points which accumulate toward my monthly S&P point budget.
Occasionally I take out 10-15 points and that's nice but it's not my primary
game and I won't take on more than a couple of points risk for any run and
I'll never take a big retracement. When I see Globex has gapped more than 10
points, I generally stand aside until I see which way the wind is blowing.
My first priority is always preservation of capital and I'm not interested
taking on risk to be a hero - better to go play golf and let things settle
down. Ditto if I've exceeded my point budget for the day.
Earl
-----Original Message-----
From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
To: FelixTY <FelixTY@xxxxxxxxxxx>
Cc: Trade Jack <trade_jack@xxxxxxxxx>; Omega-list@xxxxxxxxxx
<Omega-list@xxxxxxxxxx>
Date: Thursday, October 08, 1998 8:54 PM
Subject: Re: Handling excessive volatility
>The problem is that many traders feel they 'need' to be in every trade,
they
>'need' to try to catch every move. As a trader, you don't have to catch the
big
>move down and then try to catch the big move up. For example, if you are
short
>S&Ps and you got short this week, you probably were not at a loss today. If
you
>have a short term perspective, at one point todday you had at least 50 S&P
big
>figures in profit. If you weren't short for a longer-term trade, you could
have
>set a reasonable profit target and gotten out at a nice profit. You don't
'need'
>to get long today. If you make 30 or 40 SP big points in a day, give it a
rest.
>Take a breather. Get some perspective.
>
>I think more damage is done to accounts and more poor trading habits are
>revealed by traders that overtrade. If you have a commodity account because
you
>'have' to be in the market all the time, you are addicted, not trading.
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