Why You Should Be a Lazy Trader

Making too many trades is one of the most common (and destructive) mistakes traders make.

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.

Unfortunately, this causes a lot of traders to “work hard” when they trade. And hard work almost always means trading too frequently.

Trading frequently wouldn’t be such a problem except it often means taking a lot of sub-optimal trades.

Traders who “work hard” at trading ultimately find themselves in a lot of bad trades. Rather than wait for an ideal set-up, they get into trades almost daily, no matter how good or bad they are.

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

Example: Jack R. made 41 trades in Sep 2007. If you do the math, that’s more than one trade a day. Now, Jack made a profit, but barely.

When October came, he and his wife packed up their SUV for an extended road trip around the U.S. This turned out to be a good thing.

Naturally, Jack brought his laptop along. He planned to do some trading while he was on the road. But even though he had his laptop, he didn’t have a good Internet connection.

Because he couldn’t connect to the Internet most of the day, Jack only made 26 trades in October. These trades were better planned and better executed.

Now, get this. Even though Jack “worked” nearly half as much in October, his profits more than doubled in one month’s time!

Here’s the lesson…

Trading doesn’t involve a bunch of hard work. And if you believe it does, you might be walking away with far less profit than is possible.

Be a lazy trader instead.

Wait and watch for ideal set-ups before you risk money in a trade. Focus on making a handful of masterful trades rather than a string of so-so trades.

And stick to your trading rules. Be patient. Only take trades that meet your criteria precisely. Then sit back and enjoy your financial reward. This is why you should be a lazy trader.