That’s a very good question! With such a wide universe of markets to choose from and with a near infinite number of tools at one’s disposal including charts with various timeframes, market indicators and other forms of market intelligence it seems that there are a limitless number of opportunities on offer each day.
But with opportunity comes risk so it is wise to incorporate into one’s trading routine some filters which reduce the amount of ‘noise’ the markets generate, leaving behind only the ‘best’ opportunities on which to risk trading capital and when I say ‘best’ I don’t mean only trades which guarantee a profit as one of my former bosses used to say, “Only give me the winning trades!”. Indeed there are many so called ‘expert advisors’ or EA’s (Expert? Don’t get me started!) offered by unscrupulous vendors who are more than happy to sell ‘magic beans’ to the unwashed masses.
For me the ‘best’ opportunities are those which are grounded in a sound methodology which can be quantified, back-tested and proven on various markets in both simulated and live environments and only traded if they are in harmony with one’s trading style and personality. There’s no point in adopting a trading strategy if it can’t be followed through all of the ups and downs that every good strategy produces. As Sun Tzu said in ‘The Art Of War’, “If the enemy leaves a door open you must rush in” and that is what trade selection is all about; pulling the trigger only when conditions are ‘right’ for you.
I think one of the many benefits of being a systematic trader is that there is an inherent filter built into the trade selection process. My job during the trading day is not to deliberate about which trade to take, the unit size, where I will place my stop or how the next piece of economic news (barring major releases) will affect my open positions as all of this work has already been done. To steal another quote from ‘The Art Of War’, “Victorious warriors win first then go to war while defeated warriors go to war then seek to win”.
During quiet periods when I am waiting for pending orders to get me into or out of a trade I find that the best use of my time is to work on the improvement of my strategies or on the generation of new trading strategies, i.e. to “expand my playbook” as Mike Bellafiore says in his great book, ‘One Good Trade’. Companies invest in R & D projects and great sportsmen allocate much of their time off the field to practicing their skills, staying fit for purpose and working on strategy so why should this approach not work in the trading arena? Markets change, systems and methods falter or can underperform for longer than one would like so why not be prepared for change?