It pays to be patient while trading. I’m sure you have heard of the “buy and hold” strategy. Today’s markets, however, seem to be much more volatile than ever, with everyone and their mom trying to be a retail trader. Yet, 95% of traders fail. Why?
One reason is that many traders jump in without much knowledge of what they’re doing. Lounging around staring at charts all day can’t be too hard, right? Trading is like any other profession, with the exception of required schooling. But it should be expected to spend a decent amount of time learning how to trade. How long depends on the quality of your training, how disciplined you are, methodologies, mentorship, etc. Just like you wouldn’t want anyone handling your finances that only had a few months of experience, you shouldn’t either. Personally, it took me around 2 1/2 years just to make break even trades.. not to break even with the money I spent, but you will always pay for education in the market, one way or the other.
Another folly is under-capitalisation. This is the main reason I like Forex. You can leverage your money and Trade with less capital; although, it is still better to have a decent amount of money invested. Going too big without understanding the risks is still not the best idea.
Now, a little about patience. Some of the best traders have simple strategies put together to pull money put of the market. And I agree with the idea of keeping it simple but learning what strategy works best for you and your trading style and time frame is important. When you are still new to trading, you will probably spend a great deal of time staring at charts and over analyzing every trade. Try not to do this. But if you do catch yourself watching a trade go in the opposite direction of your bias, this is a good time to exercise patience.
Before entering a trade, you should have 3 different prices picked out: the price you want to enter the trade, the price at which your maximum amount of risk is appropriate, in other words, where your stop loss will be set, and the price where you will be taking full or partial profit. Many times you will want to adjust your stop loss or profit target. I will go over using trading journals at another time, but when collecting data for your journal, focus on consistency, or it will be much harder to discern what methods work. So, be patient and stick to your plan. If it hits your stop loss, too bad. Regroup and start over. Maybe take a break. This goes for demo and live accounts because trading properly in a demo account is just as important for future profitability.
As touched on earlier, patience is crucial for beginning traders. Know that this job is not as easy as it may seem and it will take some time to learn. Finding a good mentor can be a giant step towards success. I would advise you to study and read many different books and authors. Every trader has a different style and you may not agree with his or her every word and that is okay. Focus on the information that helps you and knowing that there is loads of information out there, when you see ten out of ten traders agree on something, you know you’ve got ahold of some good information.
YouTube is another great resource with a huge database of trading videos. Always do your due diligence, in any regard. I have just started recording videos but I admit they are very shabby. I have a series of videos on patience that I recorded from my tablet. They contain no audio and are quite boring to watch but I wanted to experiment with one of the recording apps I have. The trade I took started around 9 PM central time until around 9 AM. I have no stop loss or profit target set. Most of the pictures I take do not because they are for illustrative purposes only and I am not comfortable teaching targets, yet. I’ll add the first and last videos here and the rest in the video section. I enjoy watching videos from ICT.
That’s all for now. I plan on doing an article on timing, next.
Futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this video or on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVERCOMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed in this video or website and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations.