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Charted Territory: The Loneliness of the Long-Distance Investor

Now may not be your time. But that's no reason to give up.

Last weekend I had a chance to catch up with some of my Bethesda friends. To a person, they all said the same thing: They're getting whacked by the market. Long-term buy-and-holders? Nailed by the tech slide. Position traders? The trendless market is not their friend. Day traders? The market's making too many dips and turns even for them.

So, it's tough out there, I know. (And yes, yours truly is not above the fray.) And it's times like this I keep thinking about my 11-year-old, Katherine.

You often read about Diana, my 10-year-old star swimmer, but you rarely read about Katherine's swimming exploits. The reason? She's good, she's competent, she's just not outstanding.

And unfortunately, swimming is one sport where you really suffer if you're not in that 70th percentile of kids your age. Katherine still goes to the same 5:30 a.m. workouts as Diana, and still does the same 4,000 yards or so in practice. The difference: While Diana has the cutoff times to get invited to meets in Richmond, Baltimore and Pittsburgh, Katherine has seen very little for her efforts. Swimming just isn't a sport where the third-string freestyler gets to travel with the team. If you have the times, you go to the meets. If you don't, you get the "joy" of going with your parents and cheering for your sister.

So, yeah, I was concerned for her. Concerned she'd give up, get discouraged and never see the fruits of her labor. Let's face it, doing lap after lap of butterfly drills is no fun if you never get the opportunity to grab a ribbon or medal.

So one day after practice I asked the coach for his assessment. Honestly, I was shocked. I was certain he'd say, she's wonderful, she's nice, she's fun to be around, but ... she's no swimmer. And he did say all of the former. As for the latter, though, I nearly fell on the floor: "Katherine will be a

great

high school and college swimmer."

Huh? What? Where was that coming from?

His explanation? At this age, 99% of the events are basically sprints. Save for maybe the 200 IM, all the 50s and 100s are flat-out speed events. Diana is blessed with plenty of fast-twitch fibers, and is strong and lean. Combine that with outstanding form on the breaststroke, and yeah, she's going to beat 99% of the kids in the pool. As she grows and matures, she may continue to be an outstanding swimmer. But for now, this is truly her time.

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Katherine, however, probably has zero fast-twitch fibers. What she does have, though, is tremendous lung capacity, a great work ethic and beautiful strokes across the board. Not surprisingly, her two best events are the 100 butterfly and 200 IM.

So, what do her skills play to? Events like the 800 and 1500 free, the 400 IM, the 200 fly. Events where the emphasis isn't so much on sprinting, but on method, training and savvy.

The catch? Those events just aren't on the program until she's a few years older. In fact, most of the events the young kids are swimming now aren't swum in any high school or college meet. For example, there is a 50 in every event for the 12-and-under age group. By the time you get to college, the only 50 remaining is the 50 free.

So, in short, the coach said Katherine has all the skills and talent to be great ... in a few years. Now just isn't her time. And knowing this made me, and more importantly her, feel better.

Now, what's all this have to do with your trading? It's simple: Now just might not be your time. But that doesn't mean you should retire from swimming or try something different. No, what it means is you have to hang in there, and wait for the market to evolve. It might mean no trading or very little trading for now. Eventually, though, the market will turn your way.

The fact is, there is no method I know of that's perfect for every market. I'm great in trending markets; lousy in sideways, volatile markets. For a contrarian, reversal trader, it might be just the opposite.

The trick is to know what you're good at and stick to it. Katherine will probably never swim the 50 breast as fast as her sister. But the 1500 free? Diana won't stand a chance. The trick for Katherine, then, is to hang in there. Keep going to the pool. Bide her time. Keep building up the stamina and working on her mechanics. And when the events finally get longer, she'll be ready.

The toughest part now is waiting. Knowing you have to pay your dues until the events conform to what you do well. The reward is there, but only if you hang in. Give up or change now, and you'll have virtually no chance in the future.

So, if you're working on all the right things and not seeing results, don't worry, because you'll probably be fine. It just might not be in tomorrow's meet.

Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at

gbsmith@ibm.net.