When Trading Financial Issues, “Patience is a Virtue”
Trading financial issues (stocks, bonds, commodities, currencies) requires focus and discipline when making important decisions that often occur in nano secs.
Real time analysis of market conditions, charts, signals/indicators, while dealing with personal emotions can cloud a trader’s mind, resulting in an irrational, and ultimately incorrect decision.
The majority of a losing run can be reversed by patience. Patience means maintaining composure and the ability to tolerate delay, which can be lengthy at times.
Patience can be applied in a lots of ways to become a successful trader.
Some of the traits in the make up’s of consistent and profitable traders, as follows:
- Wait for a move you clearly understand : Many traders who are new to the game have a very limited, if any, understanding of market internals, trends, and the geometric patterns used to identify a trade setup. Uncertainty leads to a a bad habit known as “chasing.” Chasing occurs through impulse entries based only off the movement occurring at that instant. The ability to be patient as a novice is a Key skill in developing a successful strategy.
- Wait for an Enter setup : Every trader needs to have their enter setup. Enter setups are those that you can recognize immediately and have the confidence to execute a trade without excessive analysis. Throughout the trading sessions there will see many opportunities for making trades. Having the patience to time an entry properly is as important as recognizing that proper entry may have already passed. Exercising discipline on a missed opportunity will help reinforce what you do know and correctly analyze specific signals from the market.
- Wait for a trade to develop : After entering a trade, allow it time to develop and failing to do so or a premature exit may result in losses and/or forfeiting a much larger winner. Patience and discipline are required to allow a trade to unfold and eventually realize the larger winners.
Patience is the Key element that can opened the door to profitability in trading. Patience is vital in all trading strategies and Tops on the list of those people who wish to become successful at a challenging and rewarding career.
Remember, if intelligence was the Key, there would be a lot more people making money trading, as it means thinking inside the box.
Have a terrific weekend.