Today's Quote: “Happiness is a small and unworthy goal for something as big and fancy as a whole lifetime, and should be taken in small doses." - Russell Baker.

So what is the perfect entry?

This will be the last of the series on entries. Not that there is not more to say, but simply because these are neat little insights of information. It cannot replace a formal education or years of experience. We left you yesterday with a dilemma wondering which is better; having tight stops or wide stops. Tight stops are more likely to stop out of a play that should not be stopped, but they deliver a powerful punch in the reward-to-risk department. Wide stops keep you in a play longer and more often, but cut back on the reward-to-risk factor. Can’t we all agree which is best? No we cannot and should not.

The truth is that many people want to know the ‘perfect play’, the ‘perfect management system’ or the ‘perfect entry’. There is no such thing. First, the market is a dynamic ever changing place. This is why education in the market is the only way to ‘beat’ the market. I used quotes on the word ‘beat’ because we don’t be the market like a professional fighter beats another. We beat the market buy riding its coattails in a symbiotic way.

So the question was, do you like tight stops or wide, to the extent you have a choice? Well, do you have a large account or small? Are you a patient trader or ‘hyper’? You must pick a system that compliments your style. For example, a patient trader with a smaller account may opt for wider stops. First, they don’t want to be whipped in and out of a play. It makes them feel abused. Second they only want one entry so there is only one commission. If you have a small account and are making one hundred dollars on a successful trade, you can’t spend three or four commissions getting in and out. It eats up a huge percentage of the profits. However, a hyper trader with a large account may be more inclined to use tight stops. It may require entering and exiting the play several times before getting it right. But when the play works, the gain may be thousands of dollars. The extra commissions are then meaningless.

The entry is everything. The perfect entry is a matter of opinion, but a poor entry is well defined. Remember, the vast majority of traders enter closer to where they should be exiting. Be a cut above, find the good entries.