Enemy of Patience: Premature Gratification
Purely from a neurobiological perspective, attaining and maintaining patience is difficult, especially in the modern digital world. With the non-stop rise of easily accessible stimuli, our patience levels have significantly deteriorated. Anything we desire is available around the clock and at the click of a finger.
Desire food? Order from Deliveroo instead of cooking. Need to reach a short destination? Call an Uber instead of walking. Want to find friends? Hop on Instagram instead of engaging in real-life socialisation.
These instances, among many others, get encoded within our minds and make us crave comfort in the long term. This, in turn, leads us to become impatient in all aspects of our lives.
Evidently, these conveniences are not necessarily good or bad. However, if a balance is not established, the probability of being driven into the pit of despair and detriment is high. Why? Because an impatient mind can neither succeed in the realm of financial markets nor in other life endeavours.
Three Types of Patience in Trading
Patience is an inalienable part of successful trading, and it consists of three parts:
– being patient before making entries
– remaining patient after making entries
– sustaining patience throughout the duration of the ever-lasting journey
You have probably witnessed trading influencers all over social media say that trading is 10% buying, 10% selling, and 80% waiting. This is true, although it lacks some other crucial elements that we cannot disregard.
One general rule of thumb within the market is to wait for your edge to be met before entering trades. Once that is done and you have executed a trade, the next step is to wait and give room and time for your portfolio to float. The final step is to trust the game of numbers and probabilities, remaining patient to attain success in the long run. Only by keeping our eyes on the long-term spectrum through patience can we expect to attain and retain consistent profitability.
Setting Limitations
To cultivate more patience, we should establish and sustain a set of rules and limitations. By adhering to these rules, we can disregard everything else and remain patient while letting things unfold naturally.
Personally, to retain patience in our trading practices, we use the following rules:
– Trade no more than two financial instruments: We focus on EUR/GBP and USD/CHF. This limited watchlist helps us avoid developing impatience by having to monitor multiple securities and take constant action.
– Utilise no more than two timeframes: We use the Weekly timeframe for direction and the Daily timeframe for game plans, entries, and target settlements. This approach allows us to monitor graphs no more than once or twice per day, which forces us to sit on our hands and remain patient for further development.
– Implement a weekly loss limit: We halt trading operations once this limit is reached. The goal is to refrain from overtrading and rushing into new entries based on emotions
– Work mainly with limit orders: This practice helps us avoid impatience in conducting transactions and instead follow the initial projection.
Conclusion
Patience is one of the crucial elements of successful trading. Without knowing how to be patient in the journey, one cannot achieve success within financial markets.
To develop success, it is essential to establish a set of rules and limitations and abide by them. In this article, we demonstrated some of the rules that we stick to in our trading practices. You, in turn, are free to adhere to what works best for you and develop your own set of rules.
