The set-up: Today is Canadian Thanksgiving and Columbus Day. The bond market is closed but the U.S. stock market is open. I’m expecting light volume as a result, and I am hardly the only one.
What to do about it: Yes, things may be slower than usual, but that’s fine; seasoned traders know that every day can’t be a trading day.
In my experience as a mentor, I’ve seen traders – particularly newbies — sitting at their computers being bored on slower days. This is not time well spent in the stock market.
Trading is a business, not a hobby. As with any business, you want to look back at what’s working and what isn’t working.
Many traders don’t keep a trade journal with explanations as to why and how a trade played out; good trade or bad, this is something every trader should do. On a slow day, look back at recent trades. Open your brokerage account and see what has and hasn’t been working for you. Options, small caps, ETFs, mid- and large-cap stocks, sectors, and so on. Analyze which trades have been profitable and which have been losers. Back-test those trades on charts to see the key to success or failure.
This may seem boring, but it’s better than staring at blank screens, and it will make you a smarter trader.
Davis Martin is the head trader at Dailyprofitmachine.com. He trades SPY calls and puts and swing trades individual stocks and stock options, though he’s not expecting to do much if any of that on this slow market day. He will take advantage of the slow day by giving members of his service a lesson on previous trades and potential trades to come, all culled straight from his trading journal.