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You're Poor and Impatient, and that's OK

Odds are, if you're reading this blog, your AUM is under 30 MM.

Furthermore, you probably don't trade on a multi-year time frame.

In other words, you're not Buffett. Or Bill Gross.

And that's O.K.

Weakness into Strength, and vice versa

Sun Tzu is entirely too cliche, as it seems to fill up half of the business book section. And yet, it still holds true. Chapter 6 is a good place to start, but a general theme is learning to exploit weaknesses of your opponent.

And if you can't find a weakness, turn their strength into one.

For the "whales" in this market, they can be large players. Well-staffed, overfunded, fat on their 2 and 20.

But this becomes a weakness as well.

You have 2 things that many whales can't have: liquidity and a shorter timeframe.

You have the ability to enter and exit positions with much better risk management and timing.

So while you are poor and impatient, you turn that into a strength.

Watch Your Inputs

The reason I mention this is so you can consider exactly what you are reading and whether it is truly pertinent to your trading edge.

The best example we have coming up right now is the debt ceiling news. We could sit and think exactly what the ramifications are for bonds, equities and the dollar. We could check Intrade odds, forum and blog posts, and talking heads that care more about politics than your portfolio.

But when it comes down to it, you're trading on a timeframe in which it doesn't matter. You have the liquidity to exit very quickly if you're wrong.

So how are you spending time planning your trades? Do you really care what kind of positioning Bill Gross has? Do you really need an understanding of the bank holdings of European debt? Nope. If this stuff starts to matter, it will manifest itself in price and you can deal with it then.


by Steven Place

Steven Place is the founder and head trader at