Great tweet from my friend Dasan today:
I'll take it a step further.
With my trading service, I work with people to make them great option traders. Many of these people have full-time jobs and are not afforded the luxury of time when analyzing the market.
My job is to help concentrate market information into actionable trade setups with sound risk management.
But often I'll have people that come to me looking for the Action.
Not to be profitable, not to manage risk, but to be a mini-gordon gekko, actively trading the markets and leveraging up on a smaller capital base.
People like that don't last long.
I think many retail traders will trade only out of boredom, as if to avoid something in their lives-- I call it procrastitrading, where you stare at 1 minute charts all day because if you turned off the screens you would have to get some real work done.
If you are a part time trader, realize that there must be a balance between "Real Life" and your activities in financial speculation. Getting a raise at your job could be considered a "high odds" trade, but if you want to look at red/green flashy lights all day, odds are you will miss that trade.
I've been seeing it a lot in this market-- from a technical standpoint, there isn't a lot of quality in terms of technical setups. We can take advantage of this in the options market by selling iron condors or other spreads, but for most people it's a sit-on-hands kind of environment.
But because people want action, they've been focusing on the facebook IPO, overanalyzing all this extraneous bullshit that doesn't make them better traders. Before facebook, it was the parabolic spike in AAPL, where everyone spent their time on twitter or message boards telling everyone how right they are.
And then they take overleveraged bets loading up on calls or puts-- not because they are using options for risk management, but because they want the Action.
Don't use the market as a distraction away from your work or family. Trading is not World of Warcraft.
My technical take right here is that the market is oversold, we'll probably have a bounce that is sharp and quick, followed by more news-based market stupidity.
So you can spend 4 hours a day reading every single article on the eurozone crisis, or you can focus on Quality, whether it be in trading or other aspects of your life.