Profit By Skipping Out

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

What would happen if there were a disruption at the exchange where you trade? For example, what if
-the employees of the exchange went on strike?
-someone flew an airplane into a building nearby the exchange?
-someone blew up the building that houses the exchange?
-a power outage shuts down the exchange?
-a tornado or hurricane hits the exchange?

Traders who insist on using only pure price charts and who ignore news should beware! Those events are not presaged in price chart patterns but actually were and will absolutely get reported on CNBC television as they occur!

If any of those or similar events occur, then any trade you initiate would likely get fouled up (and through no fault of your own of course). Don’t count on having your fouled up trade later rectified or remedied through cash compensation from anyone!

Instead, just skip out on trading at any exchange where those conditions occur until they dissipate or clear away. If possible, close out all open positions (although that may not be possible if the exchange shuts down voluntarily or gets blown up).

Alternatively, go trade at an exchange that is not affected by these conditions. There are public exchanges all over the world, many of them operating in English (in Canada, England, Australia, Singapore, etc).

By abstaining from trading at an exchange when these conditions occur, you’ll save yourself trading losses so that your Profits go up. Recall the formula:

Net Trading Profits = Wins – Losses - Costs

We'll chat again soon ...

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