Trading Wisdom by – Jon Tait

One of the most puzzling paradoxes of trading is that you have to show up every day, but most days your best move is to do nothing.

I don’t day trade, but I do look at a lot of time horizons, sometimes as short as 1 minute bars. But I’ve learned to focus my attention on shorter time horizons only when longer time horizons are at a critical juncture. My trading life became much simpler when just owning a stock was no longer a reason to look at a shorter time horizon than daily bars. I don’t even load up the quote streamer until I’ve made the decision to buy or sell a stock that day based on daily and weekly charts.

It can be more optimal to trade extremely short time horizons, but the benefits of trading very short term don’t scale linearly due to transaction costs becoming more difficult to beat. 

For me, it is important to not have to grind for every dollar. I don’t want a full time job from the markets, but I do want to make high returns on my money, so I consistently reform my trading to be in line with these goals.

I start off every campaign in a stock very fickle, weak handed. As a position works for me and I pyramid into a larger position, I become a strong hand; I’m dug in.

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