There’s an old saying, “Patience is a virtue” which is loosely translated into the ability to tolerate something that may take a long time. In trading, patience is a necessary discipline to be successful. Some people are patient by nature and others… Well, it’s a learned trait.
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Patience helps you keep your wits about you, holds back emotional outbursts, and often prevents us from doing something we might regret later. To be patient takes strength of will and practice.
So, how does one learn to become a more patient person and incorporate this new zen into their trading habits? Let’s use a baseball analogy. You’re up at bat, two men on base, two out and you haven’t had a hit in five innings. You can let frustration get the best of you and swing at everything coming down the pipe or you can breathe, watch the pitcher’s stance, zone in on the ball, and wait for the good pitch instead of whiffing at all the bad ones.
As a trader, you must become that educated, patient batter. You go in the game knowing which pitchers you should be facing, their strengths and weaknesses, you train accordingly and study the tapes. Like investing, you know what you’re investing in ahead of time, you observe the markets, trace its history, see its trend lines, place your order and hit the button. Winners have patience to do the hard work.
There are a few things you need to understand about the trading mindset. In theory, it sounds so easy and makes sense that even Captain Obvious would chime in; but in real-world practice? Sometimes patience falls by the wayside. Sometimes we just have to look in the mirror and say, “Do what I say, not what I do,” and change bad market reactions to good action.
Practice Patience In Five Steps
Step One
Stop. If you’ve been on a hot losing streak – STOP. It’s not the market’s fault that you’re losing money. Maybe you jumped in at the wrong time. Maybe your intel was bad. Maybe you’re chasing an asset and when you finally catch it, you’ve become the bag holder. Just stop it.
Step Two
Reassess. Make time to evaluate the market actions and your reaction to it. One of the worst habits you can develop is over-trading. This often stems from panic buying, frustration and the complete loss of your patience to do the right thing. More trades does not equal more money unless it’s losing money. More trades equal more transaction fees, less commitment toward attention to detail. Are you on this hamster wheel? If so, see Step One.
Step Three
Observe. If you wish to become a winning trader, then the patience to study and observe the markets is the key to success. Look at the market history, current trends, news and developer announcements. Are you watching the short-term market trends or the long-term trading arcs? Self-awareness is a form of internal observation. Coming to grips with your trading style is paramount and your observations and market studies should be reflective of your goals.
Step Four
Start small. This might mean sticking to one or two assets that you are interested in trading or using a smaller percentage of your liquid assets to trade. Set realistic goals and get smaller wins. This will help build your confidence back up, especially if you’ve been on a losing streak. Starting small forces you to be more patient in your actions. It also allows you to really observe what’s happening with your trades so that you can react quickly.
Step Five
Stay consistent. Patience and consistency go hand in hand, especially with trading. Become a creature of habit. Here are some things you can try:
- Make trades at around the same time of day every day.
- Develop a routine of checking the news and studying the charts before placing your orders.
- Double-check your stop-losses and trading bots before your trading day begins.
Creating these routines requires patience. Staying consistent will help build your portfolio.
Here’s a bonus step, not so much in patience but in common sense: Only trade with money that you can afford to lose. Hope is one thing. Expectation and assumptions are another. There is no such thing as a “sure thing”, especially in the cryptocurrency markets. Volatility is high and market support can shift like a fault line during an earthquake. Patience to quickly assess, do the right thing, and regroup is necessary for trading longevity.
Just remember that you don’t have to try everything. Have the peace of mind to stick with what works and build your portfolio for success. Like baseball, sometimes winning requires a bunt because you can’t swing for the fences and expect a home run all the time. Be patient. Stay disciplined. Good luck!
Disclaimer
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