Profit By Skipping Out, 2

This is the third of a series of articles started July 10, 2006 (article entitled “The Simplest Way to Increase Profits “). This series of articles is about increasing profits from trading by abstaining from trading when losses are likely to occur.

Today, consider how you send orders to buy or to sell whatever instrument you trade. What if that way of doing it becomes intermittent or disrupted?

For example, if you use cable internet to send your orders, what if you notice that within the last several minutes your cable connection was intermittent? That sometimes happens to me when I use my wireless notebook computer.

Or if you use a telephone, what if you notice that on your last phone call, you got disconnected several times for some reason unknown to you?

If you try to trade during those conditions, your order to initiate a position might or might not be successfully sent. You might not even know whether or not you have an open position. You won’t know that you should be sending in a stop loss order if you don’t even know you got an open position.

Or, if you are trying to exit an existing position, you would not know whether you did or did not exit. You might even “exit” twice. For example, suppose you are long 10 e-Mini S&P’s. You order a sell. When the smoke clears you end up selling 10 e-Mini’s TWICE, ending up with a net position of 10 e-Mini’s short.

Instead of trading under these conditions, just skip out on trading until these conditions dissipate or clear up. You’ll save yourself trading losses so that your Profits go up. Recall the formula:

Net Trading Profits = Wins – Losses - Costs

more tomorrow...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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