Can Limited Time for Trading Be – A Good Thing?

Fellow reader Sashi N. (posting with permission) contacted me with this trading concern:

Hi Dave – my biggest issue with trading right now is time!

Being a senior pro at my organization, I am unable to dedicate serious time towards trading, and actually get to spend just a few hours every weekend.

I need a good process to organize my time (charts, scans, learning, coding, testing – and so on)

Sashi N.

I immediately thought back to when I first started trading. I was working full time at AT&T and had recently finagled the ability to work from home after my youngest daughter was born. Residential broadband was just becoming widespread, so I converted our toolshed into an office that was almost habitable (there were plenty of mornings when I started my day in a 40 degree “office” with blue skinks joining me for coffee). Working remotely gave me an extra 2.5 hours a day (commute time + lunch) to do more outside-of-work activities: exercise, spend more time with my family, brew beer and, of course, trade.

Despite this newfound flexibility, time to dedicate to trading was still very much at a premium for me. Regular meetings, ad-hoc conference calls, actual work, and a newborn baby consumed my days and left precious little time to think about the markets at all, let alone day trade!

My Extremely Time-Constrained Trading Routine

I found a way, though, by carving out a routine that was just barely feasible. I religiously set aside 30 minutes every weekday morning to closely observe the market and trade. Starting with the open at 9:30 am, I’d watch the market action specifically looking for my predetermined setups in gapping stocks.

I’d enter my trades and then immediately submit my exit orders. At the time it was trendy to use “mental stops” – that is, some traders wouldn’t enter explicit stop orders for their exits, but they’d have a price in mind that they would watch and then manually exit when the price was reached. With my extremely limited schedule, I didn’t have the luxury of casually monitoring my positions all day – my only option was to use explicit stops and go on about my day job.

Once the clock reached 10 am, the conference calls and meetings began – I had to stop trading. And there were plenty of days my boss would call me during that first half hour (the nerve!) and I’d have to cut my trading short and skip some profitable trades.

In the moment, I recall being very frustrated with my situation. If only I had more time, I could have entered more profitable trades after 10 am, managed my positions more responsibly by watching the intraday action, traded more strategies throughout the day, and created a plan to trade the lucrative market close.

I could have made so much more progress more quickly!

My Time Crunch was an Advantage

Looking back now, though, I realize that these constraints instilled some valuable trading habits that still benefit me to this day, 22 years later.

I HAD to Trade a System

Because of the severe schedule constraints and distractions, I had to execute a pre-planned strategy. There was no time for concocting hypotheses on the fly – the setups either met my criteria or they didn’t. I didn’t second-guess myself. If there were potentially profitable situations I noticed that weren’t captured by the system I was trading, I would take note and do research on the weekends to determine if they were feasible to trade.

Overtrading was Impossible

I didn’t HAVE the ability to take trades willy-nilly; I barely had time to take the trades in my existing trading strategy! Taking off-the-cuff boredom trades was off the table.

No Exiting Too Early

If I’d had time to stare at my positions’ P&L all day, there certainly would have been plenty of instances I would have caved and exited a position earlier than planned because it “felt right” only to have it continue without me. My schedule allowed me to unknowingly avoid what I realize now is an extremely common trading mistake.

Forced to be Ruthlessly Efficient

My situation forced me to think hard about systematizing my trading. I wasn’t auto-trading at that time but I may as well have been: I had to create a plan to trade a fast trading system in a short amount of time.

That meant removing distractions: using Trade-Ideas to alert me for the EXACT situations I wanted to trade and nothing else, having a predetermined game plan, and confining myself to the types of strategies that were realistically possible for me to trade.

Look closely at your own situation – those seemingly frustrating constraints might very well help your trading in the long run.

  1. This isn’t only applicable for those with time constraints. Many of us who trade full-time are / would be well served by most (if not all) of your recommendations.

  2. Hi Dave,
    Enjoyed your very insightful article. Your point reminds me of the adage
    ” staying out of your own way”.
    I’m not in the  day trader category because I learned long ago that I’m not good at it and more importantly I didn’t want to spend my whole life in front of a computer screen.
    I’m more of a swing trader but even with that I had to learn valuable lessons before becoming profitable.
    Now I use the same metrics you describe but my trades are in an expanded time range.
    Whatever setups I find, I just set alerts to let me know when a trigger is hit and.then I stick with it, whether it’s to buy or sell. I don’t 2nd guess if I can squeeze a bigger gain out of a surging stock, or hunting for a lower entry point than I originally had set.
    I learned 2nd guessing my original analysis almost always burned me.
    Take care.

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