[N.B. This blog post is adapted from a more technical post on The Margin Call.]
Time is the justice that examines all offenders. –Shakespeare
With an impossibly busy July and August ahead of me, I’m starting to weigh the pros and cons of shoring up my long-term positions with my day-trading capital.
Two things happened this week. For a hot second Wednesday, all of my long-term investments flashed green simultaneously. I also lost money day trading.
I’ve had a lot on my plate: work, LSAT preparation, July 4th barbeques, travelling, etc. Not putting in my all has taken a toll. I find myself winging it on some trades, entering unprepared.
Trading takes time. If you don’t put in the time, you’re headed to the poorhouse. There’s no substitute for hours of staring at the tape. That tape-time must be supplemented with a voracious diet of reading, self-education, processing. The markets are so complex that it’s possible (and some would say advisable) to spend as much time reading as one does operating.
The expenditure by which one makes money trading — the spending of one’s time — is also its biggest opportunity cost. Opportunity costs — we are told in Econ 101 — are the costs you incur by not doing something else. Here, the opportunity cost of trading is the time I’d spend doing other things. The opportunity cost of doing those other things is the money I’d make trading minus the profits I’d reap letting my money sit in longer-term positions.
Time is the ultimate paradox — in trading and in life. You can get more money, but you never get more time. Time is free, but it’s priceless. You can spend it, but you can’t buy it. You can use it, but you can’t own it. Once you’ve spent it or used it, you cannot get it back. In a sense, time is the ultimately liquid capital — the only cash you have Right. Now. Yesterday is a defunct futures trade, and tomorrow is a negotiable forward contract. Lost time is never found again, and found time is immediately lost.
Time is of the essence, sure, but isn’t the decision of how to spend that time more essential? It’s said that time heals all things, but what about the afflictions from misuse of that time?
I must think carefully here. I have limited capital with which to enter the trades of daily life. Do I invest that capital in law school applications, my senior thesis proposal, LSAT preparation, writing, emails with friends, vacations to Alaska? Do I put my actual money in market-neutral positions, thereby saving myself from the screen between 9am and 4pm?
Time is the increment of existence. The judgment call on how to spend it is always made on the margin.
Trading Time
July 9, 2009 by kileyaustinyoung
[N.B. This blog post is adapted from a more technical post on The Margin Call.]
Time is the justice that examines all offenders. –Shakespeare
With an impossibly busy July and August ahead of me, I’m starting to weigh the pros and cons of shoring up my long-term positions with my day-trading capital.
Two things happened this week. For a hot second Wednesday, all of my long-term investments flashed green simultaneously. I also lost money day trading.
I’ve had a lot on my plate: work, LSAT preparation, July 4th barbeques, travelling, etc. Not putting in my all has taken a toll. I find myself winging it on some trades, entering unprepared.
Trading takes time. If you don’t put in the time, you’re headed to the poorhouse. There’s no substitute for hours of staring at the tape. That tape-time must be supplemented with a voracious diet of reading, self-education, processing. The markets are so complex that it’s possible (and some would say advisable) to spend as much time reading as one does operating.
The expenditure by which one makes money trading — the spending of one’s time — is also its biggest opportunity cost. Opportunity costs — we are told in Econ 101 — are the costs you incur by not doing something else. Here, the opportunity cost of trading is the time I’d spend doing other things. The opportunity cost of doing those other things is the money I’d make trading minus the profits I’d reap letting my money sit in longer-term positions.
Time is the ultimate paradox — in trading and in life. You can get more money, but you never get more time. Time is free, but it’s priceless. You can spend it, but you can’t buy it. You can use it, but you can’t own it. Once you’ve spent it or used it, you cannot get it back. In a sense, time is the ultimately liquid capital — the only cash you have Right. Now. Yesterday is a defunct futures trade, and tomorrow is a negotiable forward contract. Lost time is never found again, and found time is immediately lost.
Time is of the essence, sure, but isn’t the decision of how to spend that time more essential? It’s said that time heals all things, but what about the afflictions from misuse of that time?
I must think carefully here. I have limited capital with which to enter the trades of daily life. Do I invest that capital in law school applications, my senior thesis proposal, LSAT preparation, writing, emails with friends, vacations to Alaska? Do I put my actual money in market-neutral positions, thereby saving myself from the screen between 9am and 4pm?
Time is the increment of existence. The judgment call on how to spend it is always made on the margin.
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