This post discusses the timeless wisdom from George Soros and Byron Wien about knowing when to trade and when not to.
George Soros offers Byron Wien timeless trading wisdom
The other day @neckarvalue tweeted out this passage. I don’t know the origin of the source material but Soros’ advice to Wien hit me like a ton of bricks. Read the passage and we’ll discuss on the other side.
Trading for the sake of trading
We call ourselves traders, so we trade. Most of us give little or no thought to whether the market conditions are conducive to profitable trading or not, we just keep on trading. How much better would our trading be if we took a few moments to fully consider each day and determine if putting money at risk really made sense. I think our trading would become crisper and more productive if we’d take the time to truly think it through.
Discernment
The dictionary defines discernment as “the ability to judge well”. In the piece above Soros encourages Wien to discern between a regular day and a “special day”. It’s the ability to read between the lines to see the nuances that make all the difference.
As aspiring traders, we may not have the experience and wisdom to know when a special day is upon us but we can certainly think about and work hard on discerning certain set ups in our trading that make for a “special trade”.
1. Is the trade set up something special? Each day there are hundreds of opportunities to trade. What makes the trade set up you are looking at a special opportunity? Traders who can discern special opportunities vs run of the mill ones set themselves apart.
2. Is the market at an inflection point? Can you see a shift in the dynamics of the market place? Picking up on a shift from “buy the dips” to “sell the rips” ( or vice versa ) is one of the most important moments to discern in any market, sector, or stock one can make. Some people can see it, while others can’t or wont. These are special times on a chart.
3. Discerning your mental state for trading. One of my favorite truisms is “good traders don’t conquer markets, they conquer themselves”. Can you tell when you are sharp and prepared vs tired and ill-prepared to trade? If you can, do you have the courage to step away from the trading desk for a day, a week, or a month? Learn to discern the signals of your own body. Listen carefully to what it’s telling you. Act upon those messages.
Anyhow, as always, lots to think about and actions we can take to improve our trading psychology. I hope you put the ideas from George Soros on discernment to work in your own trading.
Getting stuck or confused? Reach out to me. Happy to do my best to help.
Happy hunting and good trading
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