Traders and Investors Have Opposite Mindsets

Jordan Kimmel |

Traders are often at their best when trends are in place and volatility is low. That is when the biggest bets are made. You’d think volatility is good for traders, but not when this level of volatility hits. In these times, it is best to make small commitments and take quick profits along the way.

On the other side of things. The most successful investors patiently wait for fear driven opportunities and make the bigger commitments there. It take a lot of independent thinking and a lot of patience- but that is how investors make money.

The key is to think in terms of neither all in nor all out. Think instead of using the tier system in move in and out without “the BIG decision”. I do not think of myself as working at NASA, and the old discussion that if I was wrong by one second the whole spaceship will explode on re-entry. Instead, I want to buy and sell within ranges. I want excellent entry points- not perfect.

Crocs Inc. (CROX), #1 still in consumer discretionary, is a great example.

I took my son to the golf range over the weekend. What a great metaphor for trading. Trying too hard, pressing, and banging on the keyboard are all bad for your P&L. Do not get frustrated. Relax and get find your zone.

*DISCLOSURE: No relevant positions

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