Part of any trader’s plan should include what to do in emergency situations. If you get a phone call that a loved one has been in a car accident, can you close out your trades quickly? Do you know which ones you would need to close out and which ones can be left open?
Today, I was confronted by a less serious trading obstacle: the power went out at my home. I consider myself lucky because this happened before the market opened and the trading day began. I get a chance to think and write out my plans before I actually have to enact them. Here are the issues I’ve considered for now:
1) Trade from a laptop. My normal trading computer is a laptop, so even if the power goes out, I still have battery power and can keep the computer running to close out positions and place or move stop orders, providing I…
2) Have a second internet connection option. Since the modem and wireless router are powered by the electrical supply in my house, if the power goes down, I lose my internet connection. I presently have one other option for internet connection from my laptop because my internet provider offers local wifi that I can connect to from my home. Switching wifi connections creates a brief interruption in trading, but if a 2-3 minute interruption in power can cause disastrous losses in your account, you are trading too large to begin with.
3) Have a third internet connection option. For me, right now, this is the trading app on my phone. Some people may also use their phone to create a wifi network, but I have not yet chosen to pay for that option. While cumbersome, it would be possible for me to open my account on the phone, and close out or monitor positions from there until the unexpected situation is over.
4) Have a backup trading location. Power outages tend to be localized. Wifi is offered now in many restaurants, coffee shops, and shopping malls. What places near your home offer wifi? How quickly could you get there? What if the power is out there as well? A couple of months ago, we experienced a fairly long power outage that affected not just our neighborhood, but the shopping centers near us as well. I didn’t know where the flashlights were in the house and discovered that we had no candles, so ended up on quite an expedition to find a place that was open where I could get dinner and the proper supplies. How long is your list of potential trading locations? Have you tried trading from there?
5) What’s the minimum set-up you need to trade? I often have several different charts open and potentially several different platforms while I trade. If you are used to looking at charts with a lot of indicators, can you see those same charts from your phone or tablet? If your plan is to simply exit the trades, you may not need to see the charts, but if you are looking to add stop orders to your positions, do you know where you would put them without seeing a chart?
While I was expecting to set up and day trade today, the power outage has driven me to focus on other areas of my trading. I did not need to rush to close positions or enter stop orders because I had not opened any trades yet today. If the power outage had been one hour later, I would have had more trading obstacles to face and might have a little more harried description of what to do when the unexpected arrives.
Other Trading Obstacles
I consider a power outage to be a moderate trading obstacle. A loved one in a car accident would be more severe and would require me to close out all day trades immediately. Less severe surprises might be the crash of a breaking dish (or lamp) that a pet knocks over. What happens if you spill your morning cup of coffee on your desk (or laptop)? As I was preparing to leave the house earlier this week, the doorknob came off into my hand. I had to fix it before I could leave. How would that have changed my trading plan if it had been while I was on the way out of the house to a new trading location?
Every day is full of surprises, large and small. Being a robust trader means not only having a system (or set of systems) that can trade the markets in various conditions and time frames, but knowing what to do when life throws curve balls at your trading. Being a successful trader means knowing how to handle what happens in the market and what happens outside the market.