Shrink Rap: The Art of Doing Nothing

Dr. Hendlin, I'm an active trader who is often fighting the urge to take action when I know I'm forcing it and should instead be sitting back and not trading. Why is it so hard for me to just watch the market and not react? Any suggestions on how I can change my thinking? And thanks for the perspective and fresh writing style you bring to the site. -- K.L.

Shrink Rap: All active traders know situations like these -- everything is going against you, charts appear ill-defined, preferred setups are few and far between, or the action is too whippy to get an edge. During these times, it may be a real challenge to learn how to comfortably sit back and yield, or do nothing. Why is it so important to learn how to do this?

The normal tendency is to want to actively intervene to change what you don't like, especially when you begin to feel out of control. For example, in the case of losing money on a trade, you want to stop the bleeding, and the only way you think you can do it is by following your anxiety of the moment and selling your position -- all too often, only to watch it reverse a few minutes later. Or, during the long hours of the day's trading session, you find it tough to just sit back and stay out of the action, unable to wait patiently for the best opportunities. ...