Words to Live By? (Part 6)

In this series, I am challenging some “sage advice” offered by an option trader. I left off with words about a nonexistent Holy Grail.

The trader continued:

“…because I know how the market is moving around when I’m getting my trades on and I know when to just… hold off… doing my adjustment for 5, 10, or 15 minutes to see—you know, typically it’ll reverse here so I’ll wait and see and maybe get a better price.”

This is similar to what he said about “decent entries.”  Getting a better price implies saving money on a buy or making more money on a sell.  If he can do that on most trades then he can make boatloads of money, which gives this innocent phrase heavy persuasive power.

This quote also implies profitable trading, which once again boosts persuasion in a backward, illogical manner.  If his trades fare poorly then he’s probably not going to think anything is a “better” or good price and he’s not going to think any of the entries are “decent.”  If his trades fare poorly then he would not encourage trading just one market regularly, either.  Yet, none of “getting a better or good price,” “decent entries,” or “trading one market regularly” in and of itself makes for a consistently profitable trading strategy.  Why include them as trading advice for those looking to succeed in this endeavor?

Put another way, is this guy trading successfully because of his “sage advice” or is his sage advice relevant only because he’s had a flurry of winning trades?  We can’t tell and surely nobody asks because on the surface, his advice sounds solid.