By Rob Colville on May 19, 2017 in
We’ve all heard the disclaimers – markets can go up as well as down, you may get out less than you put in… but anyone who is keen to start trading should already be well aware of this fact. It’s all part of trading. The market can go up and down and up again as it happens. Your job is to pick the right time to put money in, and the right time to take it out again.
Scary? If it sounds scary then you haven’t been watching the markets very much. Even a day of perusing what’s happening in various trades will show you perfectly just how much the market can go up and down. Now, if every one of those ebbs and flows was a major thing, a big issue, then yes, trading might be scary – and no one in their right mind would do it. Since many completely sane people do trade, then it stands to reason that not every dip and rise in the markets is a problem. In fact, watching every single trade and its dips and dives and climbs and so on is enough to make anyone a little crazy. So don’t. There’s no need to.
Yes, it’s hard to stop looking when you’ve got an active trade and you know the market can go up and down. But there is something you need to understand – no matter what the ups and downs of some trades, it is simply not going to affect the outcome in the slightest. These are the kinds of trades that are like a freight train that can’t be stopped. The might wobble a bit as they go, but it’s not going to make a single bit of difference to the outcome. Not in the least. So why worry? Why even bother to look?
So we’ve learned there’s no point in worrying about little blips in the road when it comes to a nice juicy trade. But did you know that bothering about the fact that the market can go up and down so minutely can actually lose you money? Well, it can. The best way to win when it comes to trading is to have fun, and the best way to have fun is not to sweat the small stuff because that will lose you money and, you’ve guessed it, losing money is not fun (although it is possible to deal with it).
It’s just not possible to trade against every up and down. There’s time for one thing, and for another you’ll just be making a trade then undoing it again over and over. What’s the point of that? Once you make a trade, leave it alone! That’s the golden rule and you’ll find that if you follow that, you’ll come out ahead (most of the time; nothing’s guaranteed after all).
Of course! Another useful tip to remember is that the trades you want to go for are the obvious ones. This is not a trick. This is not a double bluff. If you can’t find something then you aren’t trading that day, it’s simple. That’s how you make money, not by worrying about when the market can go up and down. Keep your money safe when there are no good trades, use it when there are, and you’ll find that wins are what happen most of the time for you.
In trading, long term trends are what make the difference, which is why short term fluctuations aren’t so much of a problem. You need to be focused and disciplined to play this game, assuming you’re playing to win. So although it’s true the market can go up and down, that shouldn’t be what concerns you. You shouldn’t even notice it if you’ve started looking at the right things.