On Friday, I was planning to get home in time to watch the market and do a little trading during the final hour of the week. That was when the pager went off and I responded to a Brush Fire. Spent that hour and a few more fighting fire instead of trading the market… So no end of week trading and no blog post on Friday.

That is real life. If you are trading as a sideline, you can’t sit and watch the market all the time.

You have a full time job and other responsibilities that come first. So you need to have your portfolio positioned for what happens when you can’t trade. Portfolio positioning with an eye toward event risk, using protective tools including things like stop loss orders and maybe even options as insurance. These things can help smooth the bumps in the road, when you can’t be there to react real time.

Most of the time missing a day or two will not make a big difference because the market doesn’t move in a straight line. It just feels like it does when we sit and watch the tic by tic coverage on the financial TV shows.

If you miss a one day rally, don’t worry there will be more. Probably soon after the next pullback…

So looking back at the market as it ended Friday, I didn’t miss a thing. It wasn’t all that different from the way it looked when it opened Monday.

We spend so much time preparing for the worst, that we forget that most of the time the worst doesn’t happen. Insurance companies remember. That is how they make money. Studying the risks, positioning properly and adapting after the unpredictable. Sounds like a good way to make money.