Profitable Trading Requires Patience

The reason most of us trade is quite obvious. We want to increase the value of our net worth. For some, the reason also includes the satisfaction of the act of trading itself. To analyze, plan the trade, and then take action has its own psychological rewards when done right. Of course, when done wrong, it can be somewhat of a setback.

Putting aside the desire to increase your spendable income for the future, trading requires that we not think in terms of how much money we can make on any particular trade, but on how we can execute our trades in a way that over time the money will take care of itself. The money is the scorecard, to let you know how you are doing, but trading is the action that requires real seriousness to excel at.

It is the process of trading that some get frustrated about. They have the training necessary, but cannot seem to get their score high enough to satisfy them. It is not unusual for some to become impatient with their ‘scores’, and therefore start taking on more trades with less than acceptable risks in the hopes of scoring big.

An illustration of such a trader can be likened to a baseball player. As the ball is thrown by the pitcher, the player has the option to swing if it looks good or to stand pat and let it sail by. If the player sees too many good pitches go by, he will get three strikes and be out. Tired of seeing good pitches go by without getting a hit, the batter may decide to swing away, even at the ill-advised pitches. This only makes the player even more anxious to score, resulting in taking more bad pitches unnecessarily. This of course has detrimental results.

The player just illustrated was failing to take action on the good pitches and became impatient to score, thus taking action when none was required.

Then you have the player that patiently waits for the good pitch, and only then takes action. If he misses a few good pitches, he does not allow that to affect his strategy, knowing that more good pitches will come forth and if he remains patient and only swing at those and not the bad ones, he will have a good result at the end.

Successful trading is not a race. It is not a game where you must swing at every market dip and peak. It is the business of planning and preparing, to take action ONLY when the circumstances fit what was planned. Successful trading requires patience in order to pull this off.

Most traders know the feeling of seeing the market make some great moves and not being a part of it. It happens often, and it can tug on you. But knowing that it happens often should be the comforting thought that it will happen again soon. All the trader need to do is to patiently wait and plan for the next opportunity, and not to impatiently jump on the train just to feel the action of trading.

After a careful analysis of thousands of price charts over the span of two decades, I have long been convinced, and rewarded, that following the pattern of trends provides the better and safer opportunities for profits. I am also convinced that trying to fight against this understanding in order to be actively engaged in a trade has not been good to my pocket. If I could take back just those trades that were not following the logic of catching higher dips in bull trends and lower peaks in bear trends, it would remove from my record perhaps 75% of all losses ever incurred.

Working on being patient, but active in planning and ready to take action when the time is right, would greatly benefit your net results. Plan out your trades without procrastinating because of a long day or other time-wasting excuse, and then be patient and always ready to act when the time is right and not before. When the final inning has arrived, you will be better pleased with your score.

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