Yesterday was a strange but interesting day, filled with small obstacles.
At around midday, my computer turned itself off and the radio suddenly went dead. A quick check of the fuse box and light switches around the house revealed an electricity outage. I was fortunate as I didn’t have any trades on at the time but this could have been a trader’s worst nightmare, especially since the stop-loss orders on my intraday trades tend to be placed very far from the spot price – they are used only as emergency measures. That said, there was always the option of phoning the broker directly to close all open positions.
I couldn’t wait around for the power to return so I drove to my back-up location – the local library in the centre of town, where they have about 30 internet terminals. With only a few weeks to go before Christmas, traffic was chaos and finding parking was hell. I went around in circles and in the end I gave up and parked in a ‘permit holders only’ spot, expecting to receive my second parking fine in less than a week (I received a £40 parking fine at the weekend when I went to London). In the library, to my surprise, all but one of the internet terminals in the library were in use. I took it and after just under an hour of trading in small size I had made enough to close the day in positive territory, factoring in the expected parking ticket. I decided to call it a day. And luckily, when I returned to my car the windscreen, it hadn’t been festively decorated with a parking fine.
The day made me think about the importance of contingency planning. So many things can fall down: electricity, internet, broadband, computers, and even brokers. As a trader’s fund grows in size it makes sense to spend a little money on insuring against some of these potential failures (a second internet connection, two computers, multiple trading accounts etc). Over time each of these failures will likely occur and even if a trader doesn’t have the money to spend on these contingencies it is important to avoid panicking by having a plan of action in place for each case.