Day Trading Quick Tip # 6 - Sit On Your Hands

Undisciplined traders frequently make mistakes that they would prefer not to make, but they make them anyway. These mistakes include things like making a trade that is not part of their trading system (known as taking a punt), over managing a trade (e.g. moving targets and stop losses for no reason), and exiting a trade too early (usually because of fear). Whatever the reason for these mistakes, they need to be avoided in order to be a profitable trader. One useful method of avoiding these types of mistakes is to sit on your hands.

Sitting on your hands (physically if necessary, or metaphorically if not) prevents you from making, managing, or exiting any trades. Sitting on your hands can take many different forms. For some traders, physically sitting on their hands means literally sit on their hands. For other traders it means going into a different room, or doing something else such as reading a book. More disciplined traders might be able to metaphorically sit on their hands, which means that they recognise that they need to avoid making any trading decisions, and have the will power to do so. Whichever method of sitting on your hands you choose, knowing when to sit on your hands is an important part of being a profitable trader.

Sitting on your hands is also often used as a way of indicating to other traders that you are flat (i.e. you are not currently in a trade), and that you will remain flat until the market provides a reason to start trading again (e.g. when the market breaks out of a consolidation and starts moving again).