My son was five years old and just joined little league baseball. I was the eager dad ready for him to make me proud. I had been preparing him beforehand to understand how the game was played. We would practice in the backyard with me pitching to him and telling him to only swing at the best pitches (the ones he thought he could hit). At his first practice, I was a bit disappointed because the coach told him to swing at every pitch. This advice was in contrast to what I told him about waiting for the best pitches.This scenario goes in line with how we are trained as traders. We are all taught how to manage our trades and when to enter and exit.
However, most traders are never taught when to "sit on your hands." Experienced traders know when to "sit on their hands." They realize that trading during times that do not suit their trading style can cut deeply into profits and create a sizable deficit that will need to be regained.STEP AWAYI have always taught my traders in the Gap Trading Room to "Sit on our hands" when we have no setups.If set-ups are not working, cut back on size and wait for higher time frame set-ups. Remember this one thing, your stocks live in an environment called the stock market. Live to trade another day and avoid deep loss days when things aren't working. Learn to step back or even step away. Go golfing, wax the car, mow the grass; do something that will keep you from damaging your account.