Why It Pays to be a Patient Trader – 10 Points

24 thg 10, 2023Patience, passion and persistence.

The three Ps of what it takes to make it as a trader.

We like to say 5% is action and 95% is waiting.

And that’s why I’ve written a complete guide to being a patient trader.

Let’s start…

No Impulsive Decisions

Impulsive decisions are the bane of any trader.

The market is known to be volatile, jumpy, fickle and are prone to make sudden swings.

These swings can cause panic, fear and can lead to really poor trading choices.

If you have the patience to wait for your setup, the right market environment and for your trade to play out – you’ll stop the impulsive and emotional decisions.

Wait for the right and conducive market conditions

Many trading systems are designed to work optimally under certain market conditions.

For trend, momentum, and breakout traders – we need to let the market move and continue to move in the directions.

Patient traders will need to continue taking their trades, when the system lines up.

And only when the environment is right, will they make money.

That’s why you need to learn to risk little with the losses.

And when the winners kick in, they’ll make up for the dips and will help your portfolio flourish eventually.

Spot only the high and medium probability trades

Don’t be a rash trader.

When you jump with every opportunity you can.

There are low, medium and high probability setups.

Wait for only the high and medium probability trades.

Skip the low probability trades that align or risk very little (0.5%).

Only trade those that align with your system’s strength and exhibit strong, favourable signals.

This will help boost your win rate and drop the chances of loss.

Hold onto winners

To grow your portfolio, you need to let your winners run.

Let the great trades, run their course.

Many traders, especially beginners, often exit winning trades too soon due to fear of a reversal.

They also exit quickly as they don’t want to take the trade to turn into a loss.

And as a result, they bank a measly gain.

A patient trader understands that great profits are made when you ride the big trends.

This will require you to resist the urge to close a winning position prematurely.

Wait it out

A trader must sometimes wait:

• Wait for a setup to come to fruition.
  
• Wait for the trade to play out.
  
• Wait for unfavourable trading periods to end.
  
• Emotional stability
  
• While you’re being patient.
  

Cut out the emotions.

That feeling of ants in your pants. Rather learn to maintain emotional stability, and avoid the emotional highs and lows.

Your trading should not feel like an emotional rollercoaster. Just do your job and treat it as a job.

Not as the lottery. Not as a gamble. Not as a be all and end all situation.

Don’t let anything cloud your judgement that can lead you to trading bad.

Master your trading strategy

Just because you have a trading strategy and gameplan.

Does not mean, you know how it works over the long haul.

A patient trader takes time to master their trading strategy.

Back, forward and real test the strategy carefully.

Trade them on different markets. See how they work taking into account the costs (brokerages, daily interest charges and even spreads).

Know how the game-plan works in all different situations and environments until you are consistent and have a proven and tested methodical execution.

Avoid overtrading

Patience helps traders avoid overtrading.

This is a common pitfall where too many positions are taken.

You have to stop revenge trading (to make up for losses).

You have to stop over trading (to try make more gains in a day).

Stick to high probability trades, a careful selection of markets and the best times to trade.

Learn from mistakes

The main time you’ll actually learn, adapt and grow as a trader – is through your mistakes.

When you make a mistake, do not sweep it under the rug.

Take the time to write them down, screenshot them and jot down a memo to yourself about these mistakes.

When you learn from them, it will prevent you from making them again and you’ll even be able to refine your strategy to avoid them.

Develop discipline into integration

Patience cultivates discipline.

That is trading well every single day or week.

Once you adapt into a routine and you have the discipline to act accordingly.

Then you will enter into a lifestyle integration.

You won’t think twice. You won’t need anything to motivate you to trade.

You will just trade well like you brush your teeth, sleep or eat everyday.

Once you have integration, there’ll be no need for motivation.

Summary

Patience in trading is a trader’s virtue.

It is an essential strategy for you, if you wish to attain long-term success in the financial markets.

Here are the key points we mentioned in this complete patience guide.

No Impulsive Decisions
Wait for the right and conducive market conditions
Spot only the high and medium probability trades
Hold onto winners
Wait it out
Emotional stability
Master your trading strategy
Avoid overtrading
Learn from mistakes
Develop discipline into integration