Written by A.J. Brown

Why You Should Be a Lazy Trader

Be a Lazy TraderOne of the biggest mistakes I see over and over again is trading too frequently.

You’d think it would be something more technical than that. Maybe misreading charts or not following money management rules. But it’s not. It’s making too many trades, plain and simple.

Why is this?

Well, I have a theory about that…

Most people (including me) were brought up believing they must work hard to make money. It’s almost like they can’t believe that making a lot of money could actually be easy.

So they end up feeling like they have to work hard at trading if they want to make any money at it. Which results in trading too frequently.

Frequent trading wouldn’t be so bad if every trade was perfect. But that’s not that case at all.

People who believe they must work hard at trading end up taking bad trades just to feel like they’re "earning their keep." Instead of waiting for an ideal trade to come along, they get into trades on a regular basis–no matter what!

This kind of compulsive trading is really counterproductive. Worst case, you wind up with big losses. Best case, your profits are substantially reduced.

Take the case of Jack R., one of my Trading Trainer members.

In September of 2007, he made 41 trades. More than one trade a day. He made some money, but not as much as he might have.

Then October came and his wife literally forced him to take an extended vacation. So he packed up his Cadillac SUV to drive around the country for a while and do some sight-seeing with his wife.

Naturally, Jack took his laptop computer to do some trading while he was on the road. Trouble was, his Internet connection was spotty. He couldn’t always connect.

So in the month of October, Jack did fewer trades than he had done in September. Only 26 to be exact. The difference? These trades were much more strategic.

End result: Jack made more than twice the profits in October than in September. And it was almost half the work.

Here’s the lesson…

Trading doesn’t have to be "hard work." In fact, if you think of trading as "hard work," you might end up making a lot less than you deserve.

Be a lazy trader instead.

Wait for the right set-ups before putting your hard-earned money into the market. Make a few excellent trades instead of a bunch of average trades.

Never violate your trading rules just to feel like you’re being productive.

Be patient, take only the trades that fit your criteria, then sit back and reap the financial rewards.

And that, my friend, is why you should be a lazy trader.

Best regards always,

A.J. Brown

P.S. I love cats. I have two at home that keep me company. That’s why I used a lazy cat picture for this post. It’s a good reminder to be a lazy trader.

Categories: Education / Options

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  1. Personal finance money tips - April 26, 2008 | Personal Finance Money Tips @ 7:14 am (Pingback)

    [...] Brown presents Why You Should Be a Lazy Trader posted at A.J. Brown’s Options Trading Blog, saying, “One of the biggest mistakes I see [...]

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