Many beginner traders look for the one perfect strategy to trade in the markets. They spend countless hours on searching the perfect strategy, learning technical analysis, chart patterns, candlestick patterns and etc. Although the beginners traders look for the strategy and everything else but they forgot to read about the importance of patience in trading. Meanwhile it’s quite challenging to find how to use patience in the trading. Most of the successful traders has this one thing common which is patience.
Well this the the most ignored concepts of trading, what is patience in trading? Just like the every aspects of life and profession, you need patience to grow, same goes to trading as well. Patience is the most underrated skills of trading. Patience in trading is all about controlling your impulses when the market doesn’t move in your favour. However it also includes doing nothing while waiting for your setup in trading. Where most of the beginner trade randomly, press buy and sell buttons at any levels. Although the experienced traders wait patiently for the price to come on their set up. This is the one of the major skills which separates the pro traders from the beginner traders.
Why Most Traders Struggle With Patience
The beginner traders learn everything like strategy, risk management, trading psychology and everything else. Meanwhile they forget to focus on building the patience and later on they ended up:
- Doing overtrading
- Blowing up their accounts
- Treat trading like gambling
- Emotional entries
- Fomo entries
- Suggesting it’s a fraud way
Most of the beginner traders think that more trades is equal to more profits, but in the end they ended up blowing their accounts and overtrading. They didn’t set their rules, maximum trades per day, maximum loss limit per day and etc. They react to the every move instead of waiting for the one good move which is aligned to their bias and setup. And most of the time when everything aligns according to the beginner trade, then they they don’t have funds to trade on, bcoz they have already lost their funds by the overtrading, fomo and emotional entries and all.
Trading Rewards Discipline, Not Impulse
The market doesn’t care how impulsive or patient trader you are, if you won’t trade with discipline in the market. The market will always trap you bcoz the market moves every second and every minute and if won’t stop yourself after a one losing trade or winning trade, eventually the market will wipe out all your profits and your capital too.
What Is Discipline In Trading
Discipline in trading states that to follow the predetermined trading plan which you have made before or after taking the trade. It involves predefined per trade risk, entry model (like on which candlestick pattern, i’ll make my entry), per session trade and maximum loss or maximum profit per day.
Pillars Of Discipline In Trading
Risk Management: This tells you how much you’re willing to lose on a single trade like 1%, 2% or 3% percent of your entire trading capital. Your trade should align to your risk management, if a trade has more risk than your predetermined risk then you will reduce your position sizing or avoid the trade.
Emotional/Fomo Control: Ignoring all the market noise and avoiding to trade at the random zones and levels. It includes the prevention from the overtrading, protect your trading capital and helps you stick at your trading plan.
Patience: When the market isn’t moving in your favor, doesn’t give the result you expected but still you don’t overtrade or increase the risk or position sizing, this involves under the patience. When the market isn’t tapping your levels, move before your levels and still you don’t trade, that’s the sign of a pro traders. If your trading with the patience sooner or later you will succeed in the markets.
How Impatience Destroys Trading Performance
Well everyone is impatient when it comes to earning money point of view, but here in trading everything is different. According to my observation impatience is one of major reason why beginner traders over trades and blow their account. Factors that includes Impatience trading:
- Overtrading: Overtrading is one of major signs of impatient traders. They trade without the valid setup, proper risk management and position sizing. Eventually they ended up blowing their in the hope of profits, without following the discipline in trading.
- Fomo Entries: This includes trading with emotionally instead of intentionally. Executing the entries at any levels, without managing the risk properly and position sizing, the hope of capture the all move and recover the previous loss.
- Poor Risk Management: Increasing the per trade risk, increasing the lot sizing after 3-4 consecutive losses. In the hope to recover the loss in the one particular trade.
How Traders Can Develop More Patience
Developing the patience is a skill set in the trading. It requires to follow the proper trading plan which includes proper risk management, position sizing and pre-defined entry model before taking the any trade. However it required the change from needy mindset to the structured disciplined approached mindset. This trading plan includes the following:
Following Strict Trading Plan: This trading plan includes when to trade, which session to trade (asian london or nyc), per session trade(how many trades you will take in the on session). Your trading hours like 2 hours london and 2 hours nyc, apart from this 4 hours i won’t look at the charts, that’s what i follow throughout the day.
Setting Clear Entry Rules: You should have some entry rules before taking any trade, like won’t take the trade if it is exceeding my per trade risk, not desired confirmation and etc.
Focusing On Quality Setup: Always look for the a+ setup or you can say high probability setup to trade, bcoz it will help you to develop the patience and it will improvement your trading overall.
Accepting that missing trades is normal: You can’t capture every move of the market and if you try to capture the every move then you will end up doing overtrading, fomo entries and emotional entries.
Avoiding chart watching all day: Decide your trading hours like 4 hours a day or 5 hours a day and before and after this hours don’t look at the charts bcoz watching charts all the day, will create the fomo and will lead to the overtrading and fomo entries.
Conclusion
The market rewards only who trades with the patience, who has clear set of rules and trade in disciplined and structured way. The market is moving every second and every minute but you don’t need to trade every minute, every second and don’t try to capture the ever move. Just focus on one move during your trading hours and it is more than enough to make you profitable in the long term. In the long run only the patient traders survive in the market, and trade consistently while protecting their capital with the proper set of rules.
If you want to learn about the liquidity and the concepts of liquidity, you can check out my post What is liquidity In Trading? Explained