Trading Patience

In our last article, I talked about using a trading checklist to help ensure you don’t miss anything during potential trade opportunities.

Sometimes though, you just want to jump in on what appears to be a trade setting up and this is where trading patience comes in.

Not only does it help us to avoid marginal opportunities and finding trades where there really aren’t any, but it also helps us to retain enough focus to take our planned trades when they do show up.

Many people have an issue following their trading plan and this is where cultivating and mastering patience, is a worthwhile goal.


Impatient Traders Are Losing Traders

Traders who are impatient are often those who struggle. And the struggle leads to a despair that can lead to even more of an impatient tendency.

Many traders in spite of what they might believe, have at least a semblance of logical and perhaps even profitable trading plan.

But when you don’t follow your plan, all too often there’s that gut wrenching feeling when looking back at your charts and finding that your terrible day would have been a good one if only you had followed your plan.

Seeing this is one of the most infuriating elements of trading but we are all great traders in hindsight.


What Sets You Off?

There are many different triggers that sabotage trading patience and the ability to follow our plan. The amount of stress we experience in everyday life can be a big factor that impacts on our ability to remain patient.

Not wanting to miss out (FOMO) is another trigger that often follows missing a number of trades that turned out to be paper winners. The frustration of then trying to “make up” for missed trades (revenge trading) only to take losers can condition us into wanting to take a trade before it fully triggers in so as to not experience the pain of missing our planned trades.

There is a reason I wrote about using trading triggers – it stops you from taking trades hoping they will work out.

Seeing ‘better’ opportunities and convincing yourself of one of a plethora of reasons the market offers to why your plan might not work, are sure-fire ways to not maintaining the resolve to follow it.


Your Trading Patience – Nurture It

There are many ways you can help yourself to develop your trading patience. If you find that you’re able to be patient to begin with in the session but as time goes on it becomes a struggle, it may be that the emotional exertion of being disciplined and focused enough to wait for your trades is chipping away at your willpower.

It might be beneficial in this scenario, to fix a short trading window during the day and evaluate your relative performance to see if you are better able to follow your plan because of this.  At Netpicks, we have in every trading plan “The Power Of Quitting”.

To increase your emotional capacity, it is wise to identify any stress factors in your life and remove the ones that you realistically can. But really, this isn’t increasing your capacity for stress, but clearing some of the things that deplete it.

Mindset Of A Trader

“The mindset of a trader” is a phrase that is often used and in the context of not wanting to miss out, it’s very relevant. The mindset you should strive for is:

  • identifying how good an opportunity is
  • executing a trade effectively and to the best of your ability – not hoping for some good trades.

You should do your utmost to go into the trading day with no expectations and with the goal of simply trading your plan.

Being clear in your plan and trusting it is simple but requires effort on the trader’s part.

Effort in terms of recording observations to formulate a complete plan and effort in terms of thoroughly back-testing it so that you can be confident in what results it has the potential to achieve over time.

Making sure that you take the time to be as specific as possible in your rules can also help you to say whether a potential setup qualifies as a trade or not.

Take the time to nurture your trading patience isn’t necessarily the easiest of exercises a trader can choose to undertake.

It may require a great amount of personal observation and seeing how you react to different stresses.

But the value to you as a trader is potentially massive – it can be the difference between being one of the many traders who perpetually loses money and one of the few who has patience, belief and above all, turns a consistent profit.

Author: CoachShane
Shane his trading journey in 2005, became a Netpicks customer in 2008 needing structure in his trading approach. His focus is on the technical side of trading filtering in a macro overview and credits a handful of traders that have heavily influenced his relaxed approach to trading. Shane started day trading Forex but has since transitioned to a swing/position focus in most markets including commodities and futures. This has allowed less time in front of the computer without an adverse affect on returns.