Patience Pays: Why Waiting is the Key to Trading Success
Patience Pays: Why Waiting is the Key to Trading Success
The #1 skill you need to develop to succeed or fail in trading.
Patience is not just a virtue in trading; it's the difference between making it big and crashing spectacularly. Here's why patience is your best friend in the trading world, with a few funny examples and practical tips to drive the point home:
1. Avoiding Impulsive Decisions
Imagine you're at a buffet, and you pile your plate high with everything in sight. Halfway through, you realize you can't eat it all, and most of it doesn't even taste good. That's what impulsive trading decisions are like. Patience lets you wait for the filet mignon instead of filling up on stale breadsticks.
Overtrading will kill your account! DONT DO IT.
Practical Tip: Set predefined criteria for entering and exiting trades. Stick to these rules no matter how tempting it is to deviate. My number one advice especially for losing traders. Tell yourself you need to execute 1 trade well today win or lose!
2. Better Market Analysis
Think of market analysis like dating. If you rush into a relationship after the first date, you might end up with someone who hates your favorite TV show. Taking your time to analyze the market is like getting to know your date better—ensuring you're making a wise choice.
Practical Tip: Spend time studying charts, reading reports, and understanding market trends before making a move. Subscribe and read my blog and focus on learning from the trade reviews I share.
3. Risk Management
Risk management without patience is like trying to carry all your groceries in one trip. Sure, you might make it, but you're more likely to drop everything. Patience helps you manage your risk effectively, ensuring you don't over-leverage or make reckless trades.
Practical Tip: Always set stop-loss orders and never risk more than a small percentage of your trading capital on a single trade.
My Personal Trading Routine
I aim for 1 to 4 trades a day and limit my trading window to 2 hours. This approach helps me stay focused and avoid burnout. By trading less frequently, I can be more selective and wait for the best opportunities, rather than chasing every potential trade.
My Strategy for Consolidation Action
When the market is in a consolidation phase, I focus on directional trades for 1-level moves or choose 2 levels out for a credit sell trade. This strategy allows me to profit when the market isn’t trending on smaller, more predictable price movements while managing my risk effectively.
Practical Tip: During consolidation phases, identify key support and resistance levels. Or use the levels I provide for the stocks I’m watching — They often insanely accurate. Use these levels to plan your trades, whether you're aiming for a quick directional move or a more conservative credit sell trade.