Aggressive Trading

There’s a bit of a fallacy out there.

Macho-aggressive trader swinging around a big clip, smashing size at market into bids not giving a f*ck about what the market thinks…

Well by now you know that’s nonsense.

It might have worked in the pit some days (Read this)

But it sure doesn’t work on screen.

(Well you can ‘bully’ the market temporarily, say by hitting the bid on an exchange-traded instrument into fresh lows to get a low print and hoping to trigger stops. But the success rate is low these days. Unlike years ago…allegedly…)

Anyway, ego, aggression, desire to be right. Any of that and you’re doomed.

But there’s a type of aggression that can pay off…

And that’s adding to your trades as they go your way.

Adding is a pretty aggressive move right?

You’re basically saying “I’m right on this trade and I’m prepared to risk even more capital at a worse price on that thesis, click. And again, click, and again”

That’s pretty aggressive…

If you’re playing defence you’d be peeling some of the trade-off.

There’s a time and a place for both.

Just like any sport, if you are constantly going on the attack you leave yourself vulnerable in defence.

And vice versa, just play defence and you can’t win the game.

Knowing when to attack and when to defend is a skill to learn.

It takes time.

Some days you’ll get it wrong and lose.

Others, you’ll get it right and be rewarded handsomely for it.

Start by labelling your trades. Neutral, aggressive, defensive.

Then you can see which of those you lean towards, how that correlates with market conditions and if it pays off…

If you’re reading this thinking “Ok right cheers Mark, something else for me to work on in my trading, like I don’t have enough” then put it on the back burner.

It’s not a priority in the scheme of things.

But if this resonates with you, allocate some time to it and see if it makes a difference to your P&L.