Precisely What Are You Waiting For?

This is the fourth in a series of articles that started with the October 16, 2006 article entitled “How To Wait”.

Get precise about your entry and your exit.

Write a precise description of your entry criteria. If you know precisely what you’re waiting for (to enter), you’ll enhance your ability to WAIT for it. If you don’t know precisely what you’re waiting for (to enter), you might get enticed into entering a trade that you shouldn’t be in.

For example, your entry signal might be price exceeding a certain number by 1 point.

Write a precise description of your exit criteria. If you know precisely what you’re waiting for (to exit), you’ll enhance your ability to WAIT for it. If you don’t know precisely what you’re waiting for (to exit), you might get enticed into exiting a position that you should be staying with.

For example, your exit signal might be MacD crossing it’s average line.

This aspect of waiting is like taking the bus. You need to know precisely which bus to get on. Then you wait until that bus arrives and you pass up getting on other buses.

Also, you need to know precisely which stop to get off at. You wait until you arrive there, staying on the bus through the other stops.

If you don’t know your entry (which bus to get on) or your exit (which stop to get off at), you might accidentally get into a trade you don’t want or get out of a trade at the wrong place, thereby giving up too much accrued profits, giving up too much potential profits, or taking a bigger loss than you otherwise would.

We'll chat again soon ...

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