Just Do It
October 10, 2019
There is an old story, more than likely fabled, that I was told when I joined the markets many moons ago. A desk head that asks his young traders one morning what they are up. One overly keen fella pipes up 3yrs are going up. Good says the desk head did you buy some then? Nope comes the reply I’m on the bid. An uncomfortable silence was quickly followed by the rather irritated reply. Do you really believe it’s going up today (yes was the answer) then WTF are you doing on the bid just pay the offer!!
I don’t know about you but I’ve been caught out by this too many times. Second guessing my view not committing to it and missing the opportunity at worst or leaving ticks on the table at best.
There is some merit to this argument but the flip side to it can be explained by trying to trade Precious over these trade talks. Early doors I simply wanted to be long gold and silver and stay long. Capturing the move up over the last month or so was pretty easy. One had to take some money out and buy the dip a few times but that wasn’t hard either. As the talks loomed and the rhetoric (and rumours) began and the markets got really twitchy a calm head was needed. All of a sudden just paying the offer wasn’t so easy.
The solution for me was using stop entries. This time however given the risks both ways I picked my levels and had both sell and buy stops in. It meant I would leave some meat on the table but ensured I would be involved either way when it moved. As long as protection on each position was deployed, they became set and forget and I was comfortable with them. Of course, there is a risk this doesn’t work but, in this instance, I caught the sell off and booked some ticks.
I guess the moral to the story is trust your view and do it. If you are undecided, get creative and clever about how you approach it.