Trading - prices don't ONLY move up and down

We often assume, as traders, that prices only move in two directions. That's not true. While it is self-evident that prices can move up and down, there is a third direction that prices can advance -- sideways. When we take a position in the futures markets, we assume that it will move UP or DOWN, depending upon whether we go long or short. However, statistically, prices are more likely to spend most of their time progressing in a mostly stagnant, or consolidating pattern.

This is one of the factors that makes trading so difficult, because if prices are consolidating, as soon as they appear to take off in one direction, eliciting a long or short position, prices then reverse in the opposing direction. This is one of the reasons for having Rule #1 from Phantom's Gift:

Assume it is a bad trade until proven correct! Positions established must be reduced and removed until or unless the market proves the position correct.

I never maintain a position for more than a few minutes unless it become profitable almost immediately. It is not worth the stress and nail-biting! And as Phantom also mentions in his book, my judgment is better after I exit a position; my thinking becomes much more clear, and my perspective improves, because the emotion of the trade dissipates.

Feeling stress as a trader is one of the ways that we know we have made a bad trade. This stress is one of the body's warning signs of trouble. Time to exit quick when the stress level rises.