How do I feel about being flat now? Both relaxed and nervous. Relaxed in the sense that the minute-by-minute hijinx of Euro/Bernanke insanity can't zap me, and nervous that I'm going to miss out. But one thing I've read repeatedly from great traders is that the fear of "missing out" is one of the hallmarks of amateurs, and the desire to be in the market 100% of the time is folly.
I am comfortable with risk. If I weren't, I wouldn't be doing this. But when there's a huge roulette wheel spinning, and we all know it's going to stop on some unknown outcome at 11:15 PST Wednesday morning, and we know for a fact that market is going to react in some large, unpredictable way, I'd rather not subject myself to that degree of risk. It is an instance in which, to put it lightly, I'll have no edge.
What is my edge? What am I good at? Well, I'd say:
+ going through large quantities of charts quickly;
+ spotting pattern-based opportunities in those charts;
+ handling large numbers of diverse positions;
+ setting logical, responsible stop prices;
+ executing a broad plan with respect to where I think the market is heading
Where I definitely don't have an edge is having any idea what the Fed is going to do and how the market is going to react. Once that massive uncertainty is out of the way, I think I'll be in a better position to re-enter a market with a more sensible risk/reward ratio.
The risk, as I've mentioned, is that I wake up to a market down 25 points on the ES and I'm not in it. But you know as well as I do that we've basically woken up to six mornings in a row of the market being down 25 points, and by the end of the day, the loss is either trimmed substantially or has flopped into a huge gain.
Even as I'm sitting here typing this, I read that S&P downgraded Italy, and both the Euro and the ES fell instantly and fell hard. But they are already clawing their way back from the depths. With all the Greek-related nonsense going on (a bailout each and every day, it seems), who knows, the ES might even be green in the morning.
So, I've sort of had enough of this. I am defending my quarterly profit with a broadsword and a fire-breathing dragon at my side, and I'm not going to let some bald dude with a greying beard take it away from me. Not this time, pal. The markets will always be there, and if I miss one big drop, so be it. My aim is to be a successful trader, not a lucky gambler.
