Patience and Impatience
Our dive into ‘Mindset’ continues as we look at the virtue of patience – something traders often lack.
Impatience is one of the biggest demons I have fought throughout my trading career and, I believe, one of the major factors which can hurt traders both mentally and financially.
The recent rally and pullback in the ASX 200 makes this a perfect time to be talking about these issues, including overtrading which we spoke about the other day. Impatience is a different side of the same coin. So many times new and even experienced traders (myself included) get frustrated with the market and pull the trigger on a trade that goes wrong, only to have the ideal setup form not long thereafter.
Unless you are the strictest of strict traders, no doubt you have experienced the feelings of dread and remorse that come from forcing the action and ending up with a poor outcome, only to then be slapped in the face by the market as the perfect, profitable trade setup that you would have otherwise taken, goes begging. And it really is a feeling of remorse because you know that if you had have been slightly more patient, you would have been rewarded.
I think as traders we worry that we will miss out on an opportunity. A mentor of mine once picked up on this trait in me and acknowledged that whilst he admired my enthusiasm to trade, it was a little misplaced. He said that in his experience the market had always been there and probably wasn’t going to disappear any time soon! Simple advice but it really put things into perspective for me.
There is absolutely no rush, no schedule when it comes to trading. You can rest assured that you can take your time and that if you miss one opportunity, there will be other quality opportunities at a later point in time.
So, be patient and continue to keep an eye on this aspect of your psyche and your trading as it is something that can return without you even realising it. Impatience will likely rear its ugly head just after a losing trade or a string of losing trades, as you search frantically for that next winner to make back your losses.
After a string of losses is the most appropriate time to take a step back, consider your recent trades, and wait for a quality setup to present itself, rather than being impatient and forcing the action.
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