A variety of factors can affect a trader’s performance, keeping composure when under pressure is essential for success. The importance of having being a patient trader cannot be emphasized enough, in fact, one could even say that there is a positive correlation between the equity curve of your trading account and the amount of patience you possess as a trader. In other words, focusing on developing and maintaining patience while trading the market will cause your equity curve to rise much more consistently than not paying any attention or little attention to patience, as most traders do.
Understanding how important patience is while you start learning to trade will completely change the trajectory of your performance in the long run and help you achieve your goals faster. But before trying to figure out what your trading plan will be, you should first think about why you want to trade: Once you know the reasons why you want to learn how to trade and you have set some goals, you need to understand that there is no quick way to make money while trading. Learning how to trade requires hard work, knowledge, discipline, commitment, dedication and above all patience.
At crucial moments forex traders are inclined to take hasty and sub optimal decisions due to impatience, time pressure and lack of clarity in their plan. Trading opportunities do not arrive in a consistent fashion (despite what some trading ‘gurus’ will have you believe!). In the forex market you may spend 3 months going sideways due to lack of opportunities, then suddenly make a quarter of your annual return within a fortnight. It is the ability to wait for these low-risk/high-probability opportunity flows to come along that separates the successful from the struggling.
Patience in trading is also needed after you have placed the trade. If the price moves in the direction anticipated, you must then choose whether to sell and take a small profit or wait till the price moves even higher. Small profit vs. large profit or possible loss. If you wait too long, the price could start to move in the wrong direction and you will lose. If you act too hastily and sell, you haven’t given yourself the chance for the price to move back up. Again, this is where your set of trading rules comes into play. If you follow your own goals and strategies, then you will have more patience in trading than if you set yourself up without any guidelines.
Now that we know and understand the importance of having patience, what can we do to improve it? Don’t go looking for trading opportunities. Trading opportunities should present itself to you. Always remember that good things come to those that wait. Keep that phrase in mind before you think of executing your next trade. Write down your rules of engagement and stick it up next to your monitor. Read it to yourself out loud every morning before you even open your charting software. This will train the brain in a conscious and subconscious way.