The Do’s and Don’ts About Patience In Trading

Whether you’re a newbie or an experienced trader, you surely have a clear concept in your mind about how being patient is a key factor in trading success. In my early days as a trader, I’ve been hearing about this concept so many times that I got lost on getting its pure meaning and, most importantly, I’ve initially failed to get the best practical instructions out of it. In fact, the main subject of this article is about giving you some pragmatic suggestions on how to implement patience into trading that helped me switching gears in my daily activity.

Going further in this article I want to dispel the myth that patience is synonymous to waiting. They are not and at the end of this reading I’m sure you’re going to agree with me, so let’s get into the details. Following here, there is a list of three dos and three don’ts where patience is involved trading.

Do’s

Waiting for “A” quality setups only: Regardless what’s your favorite strategy is, some day trading opportunities will present themselves on a daily basis. If you take only the best out of those, you will be only trade the best and leave the rest. At the same time, you won’t mess up with overtrading or revenge trading. It has been proven by many successful traders that trading more than 4-5 times per day on average doesn’t give any profitable edge and can be counterproductive instead.

Looking for opportunities coming to you rather than the opposite: Here is another critical subject, once you’ve a clear picture of what a promising setup looks like based upon a proven strategy, use it as the input for your trading instead of hunting around many different stocks where you’d like to see a breakout/breakdown. Let it come to you because there is no benefit on forcing any kind of trades.

Respecting the original plan once you’re in a trade: Plan the trade and trade the plan. Assuming that your trading strategy has a proven P/L ratio higher than 1:1, it means keeping your winning trades larger than your losing trades by only respecting what you know is working.

Don’ts

Waiting to stop out a losing trade: Here is the first huge difference between being patient and being stubborn. The first one is a great virtue, the second one it definitely isn’t. Accepting the fact that a trade didn’t go the way you were looking for it to it’s an emotional process that needs practice to be implemented. The faster you’ll get there, the sooner you’ll be trimming your losses out considerably and you’ll turn your trading consistently profitable.

Hesitating to jump in when a great setup stands out: This is a situation where I find myself more times that I’d like. Knowing that no trades have 100% of probability to work out in your favor, you’ve got to consistently trust the best setup when they occur. Hesitating too much not only will result into not taking a potential winning trade but also is a pre-requirement to another bad practice any trader want to avoid which is chasing a trade. If you’ve missed the best entry (you can rest assure that it will continue to happen from time to time), do not get caught by the fear of missing out. Instead, just wait for the next promising setup before jumping in.

Rushing to take profit when a trade goes as for the plan: Here is another condition I’m quite confident every trader has experienced. In a rush of being in need for a winning trade, taking a much smaller profit than what it could have been once it is nicely going the way you were planning it to. So, be patient and let it work, especially once you’ve been good enough to put yourself in the driver’s seat.

See you in chat-room!

Trade safe,

Roberto Barbaro