How To Be Patient In Trading
Cultivating the Art of Patience in Trading
So how to be patient in trading?
Before I became consistently profitable in the market, I had to improve my patience in a big way. To do so I found several techniques that worked for me and can hopefully work for you too.
1- Get clear on your why
You have to get really clear on why it is you’re trading.
If the reason why you are trading is good and strong enough, it will be easier for you not to get carried away by your impatience.
If you’re trading because you like the excitement of winning and losing daily, or the satisfaction to show to the world you’re right on a few trades, you could have better odds in a casino.
If you are trading because you really want to be able to support your family, or be able to become financially independent, associating this goal with patience will remind you of why being patient is important to you and keep you from making rash decisions.
2- Do not focus on the money
Focusing on the money will activate your flight or flight response and make you act in irrational ways.
Try as much as possible not to associate trades with money. To do so, you can for instance focus exclusively on your charts, hide your paper profit/loss value on a particular trade, stop watching your account P/L everyday, and focus on following your trading plan, instead of how much you might make or lose.
3- Have a checklist before entering any trade
Just like pilots before taking off, have a checklist you go through before entering any trade. When you see an opportunity, go through your checklist. You’ll see right away whether you should or should not enter that trade.
4- Get busy
Getting busy during the trading day instead of watching every tick will be of tremendous help. Instead of watching the market or your positions like a hawk, have an automatic entry/exit signal that will be sent to you by email or directly to your mobile when you actually have an action that needs to be done (buying or selling). When you have this process in place, you can go on and enjoy your life, doing some research, exercising, spending time with your friends and family, shopping, … From my experience, the less you watch the market and your positions, the more your P&L will increase.
This one is often overlooked, but sleep deprivation literally steals your patience.
Having a daily practice of meditation will have a tremendous impact on your ability to be patient over time. Firstly, meditation will force you to focus on the present moment. By staying focused on the present moment, you won’t think about how much money you could lose if your position goes against you and will be perfectly alert in order to exit your position, should an exit signal be triggered. Secondly, meditation will reduce stress and improve your ability to direct your focus.