You don't have to make an investment decision

There is a major economic announcement, the market starts moving, and trading volume has increased. The talking heads are abuzz with their analysis. Under this situation, many investors believe that they have to make a decision or take some action. If everyone else is doing something, I must do something too. Follow the herd when the twig snaps. However, without a plan, this could be the worst possible action.

Perhaps one of the greatest qualities of employing a system is knowing when not to trade. A good trading system will likely have you sit and do nothing a lot of the time. Shocks to the market will generally not be significant. Success is based on waiting for those that are meaningful. The idea of any rules-based system is to limit trading to those times when there may be an edge or a true reaction is necessary. It will have you do nothing if there are no identified opportunities and it will have you sit and do nothing if you are in trade that is making money regardless of what new information may be coming into the market.

I like to idea that a system can tell me when to act. I may like it even better when it tells me not act even when I have the urge to do something. A system stops my emotions from getting the better of me. Patience is an investment virtue. Keep calm and do nothing until the odds are in your favor.