How Lazy Traders Make More Money
One of the biggest mistakes traders make is trading too frequently.
Given the complexity of option trading, you might think it would be a more common mistake to misread charting patterns or forget to check for stochastic shocks. But it’s not. The biggest mistake is trading too much.
Why is this? Well, I have a theory about that…
Most traders hold onto wrong ideas about money because of how they were raised. They think making money must always involve hard work. They have a hard time believing it could be easy.
Because of this, they end up trying to “work hard” at trading. And their idea of working hard is trading as often as they can.
Frequent trading wouldn’t be so bad if every trade was perfect. But that’s not that case at all.
People who believe they must work hard at trading end up taking bad trades just to feel like they’re “earning their keep.” Instead of waiting for an ideal trade to come along, they get into trades on a regular basis–no matter what!
This “trade-as-often-as-you-can” approach is highly counterproductive. Chances are you’ll suffer big losses.
Example: Jack R. made 41 trades in Sep 2007. If you do the math, that’s more than one trade a day. Now, Jack made a profit, but barely.
When October came, he and his wife packed up their SUV for an extended road trip around the U.S. This turned out to be a good thing.
Naturally, Jack took his laptop computer to do some trading while he was on the road. Trouble was, his Internet connection was spotty. He couldn’t always connect.
Jack only made 26 trades in October 2007 because of his limited Internet access. The trades he did make were more strategic and better planned.
Now, get this. Even though Jack “worked” nearly half as much in October, his profits more than doubled in one month’s time!
Here’s the lesson…
Trading doesn’t involve a bunch of hard work. And if you believe it does, you might be walking away with far less profit than is possible.
So practice being a lazy trader instead.
Wait and watch for ideal set-ups before you risk money in a trade. Focus on making a handful of masterful trades rather than a string of so-so trades.
Never compromise on your trading rules to make yourself feel like a “hard worker.” Just practice patience and wait for the right set-ups. This is the way to wealth, and why you should value laziness as a trader.
