InvestorQ : Is it true that most traders are obsessed with timing the market?
Rutuja Nigam made post

Is it true that most traders are obsessed with timing the market?

3 years ago

In a way your right because quite often traders believe that the best way to trade markets is to buy cheap and sell expensive. That is hardly the case for a trader. When you are trading in the markets your alpha is not generated by identifying that one big multibagger. That is the job of a long term investor. Your holding period in trading is not determined by your view on the stock. On the contrary it is determined by your need to churn your capital and the need to protect your capital loss beyond a point. A lot of traders tend to erroneously believe that this gap can be bridged by timing the market to perfection. The point is that it is impossible to time the market to perfection. Markets are, by default, random representation of price movements and hence taking a precise view on the market direction consistently is next to impossible. When you are trading on very thin margins and low costs, better timing makes a big difference. But the problem is the obsession with timing the market. Try to be approximately right than being precisely right! Timing does matter but then don’t get obsessed with timing. It is not the only way to make money and it is quite impractical on most occasions. Try to be approximately right but make the best of when you are right.