The Importance of Timing

In trading, timing is everything. As you scan the market looking for opportunities that fit your trading strategy, it can be tempting to do one of two things, both of which are highly detrimental to your long term trading success. It is important to wait for the right timing, simply because this develops discipline and improves your ability to trade methodically.

The two temptations you face when timing isn’t quite right:

1. Forcing a trade that isn’t quite there

We have all been here and let’s face it, it can be very tempting to place an order on a market that hasn’t set up yet, especially if you have been stalking it for a while. Even though you may be able to tick off several factors on your trading check list, you must still wait for the market to reach your precise entry point before you take a position. If you don’t, the fact that you’ve entered the market prematurely only introduces an element of doubt into your trading – i.e. did you have a winning trade because your strategy works, or were you just lucky?

2. Taking a trade which has already been triggered

Consider now a set-up which triggers while you are in front of your screen, do you quickly place a live market order and tag on to that move? After all, you may have been looking at it already and it fits your strategy criteria. What should you do?

The answer is you should do nothing and go look for another opportunity. We had a great example of this in one of our live trading events last week, when a trade we were looking at triggered while we were taking screenshots for our records. Even though it was tempting to get amongst it with a live market order, we showed restraint and let it go. Chasing a move is never a good idea, because again this will introduce uncertainty into your trading.

Silver cash market – price has already broken down through support.

The benefits of timing an entry precisely.

Professional traders have long term trading success because they are focused on timing their entry precisely as part of flawlessly executing their trading strategy. When you focus on flawless execution and timing, not only will you be able to develop a methodical approach to trading but you will also have peace of mind knowing that your wins/losses are not arbitrary. So don’t second guess your trading strategy, time your timing instead!

Happy trading!  

Regards,
The TWP Team