Patience Pays in Day Trading
Everyone has heard the statement “Patience is a virtue.” Well, I am here to attest to the truth behind the saying while day trading the markets.
Day trading requires an extreme amount of focus while making important decisions that often occur in split seconds. Simultaneous analysis of Market conditions, charts, and indicators all while grappling with internal emotions can cloud a trader’s mind, resulting in an irrational, and ultimately incorrect decision. The majority of a losing rut or slump can be quickly reversed by patience. Patience is comprised of maintaining composure and the ability to tolerate delay, which can be lengthy at times.
Ways to Improve Patience
Patience can be applied in a myriad of ways to become a successful trader.
- Wait for a move you clearly understand – Many traders who are new to the profession have a very limited, if any, understanding of market internals, trends, and the geometric patterns used to identify a trade setup. This uncertainty can lead to a detrimental habit known as “chasing.” Chasing most often occurs through impulse entries based only off the movement occurring at that instant. The ability to demonstrate patience as a novice is a critical skill in developing a successful strategy.
- Wait for your “Go-To” setup – Every trader needs to have their “go-to” setup. “Go-to” setups are those that you can recognize immediately and have the confidence to execute a trade without excessive analysis. Throughout the trading day you will see many opportunities for placing trades. However, having the patience to time your entry properly is equally important as recognizing that proper entry may have already passed. Exercising self control on a missed opportunity will help you reinforce what you do know and correctly decipher specific indications from the market.
- Wait for your trade to develop – After entering a trade, you must allow it time to develop and failing to do so or a premature exit may result in losses and/or forfeiting a much larger win. A great deal of patience and discipline is required to allow a trade to unfold and eventually realize the larger wins.
Patience is the key element that opened the door to a path of profitability in my trading. If you can practice patience while keeping your emotions in check your trading decisions will be influenced solely by skill.