Why aren’t we patient while trading? Why do we prefer instant results always? We’ve become an immediate gratification culture, and we expect profits to come quickly, efficiently in the way we want. When that doesn’t happen, we tend to become increasingly frustrated and irritable - a sign of impatience. One source says that, for one thing, in trading, impatience is linked to frustration, irritation, and even anger. Such emotions can raise our stress level, which in turn can harm our health. Impatient isn’t harmful only in trading, it’s also harmful in other areas of life. Author Marvin Lewis writes: “In an act of impatience, a man in San Francisco, California, tried to beat traffic by swerving around a lane of cars that had come to a stop. However, the lane he pulled into had just been laid with fresh cement, and his Porsche 911 got stuck. The driver paid a high price for his impatient (Our Daily Bread, February 19, 2012).
Impatience Can Be Harmful
These are some of the adverse effects of impatience in trading.
1. Dithering: Impatience eventually leads to ironical procrastination in making trading decisions. Could it be that they felt compelled to postpone financially risky and highly competitive tasks of playing the markets, because they don’t have the patience needed to work on themselves until they become an expert?
2. Bad Trading Decisions: Certain good strategies require patience before you can find the best setups. If one is impatient, one can make hasty trading decisions that violate one’s rules and later regret it. When some orders are also still open, an impatient trader can make some unwise adjustments to the open orders. It’s been found that impatient speculators often make hurried, dismal speculation choices.
3. Margin Calls: The fate of most people in the financial markets is the consequence of undue patience, coupled with inordinate avarice. Lack of patience in trading has led numerous traders to overleverage their portfolio excessively (instead of using high leverage judiciously) because they want to turn a small portfolio to 5-figure income as soon as possible. Newbies who make huge gains and huge losses are less happy than those who go for small losses, and consequently small profits. The use of small position sizing and safe risk control doesn’t appeal to those who want instant gratification. According to Clem Chambers, you should strive to get rich slowly rather than to get rich quickly. Looking for instant riches tends to satisfy human emotions, but it can lead to quick penury.
4. Loss of Reputation: No-one wants to be identified with failures. If you can keep your investors’ portfolios safe, even in spite of small profits, you’ll still be popular with them. But if you go after the biggest possible profits within the shortest possible time (this target is attainable, but rarely leads to everlasting success in the markets), and you happen to lose your investors’ portfolios, you’ll lose your popularity. Once one’s popularity is lost, it’s extremely difficult to gain it back. It’s better to be safe than to be sorry. Some gurus were popular yesterday, but because of impatience, they lost their reputation. I’ve always featured profitable generals of the markets, and will still feature many more. However, I’m not interested in market wizards that crashed and got burned. I’m only interested in those that are permanently successful. These successful trades have protracted periods of flat performances, followed by protracted periods of roll-downs, followed by protracted periods of consistent profits. The great thing about all these periods is that these generals of the markets remain patient throughout the successive periods, and they survive the markets in the long run.
Stop Being Impatient!
It does little good to worry over things you can’t control. The more patient you’re in the markets, the more likely you’re to have better results, make better decisions, and progress in your career. Instead of losing patience over circumstances that are beyond your control, try to identify things you can control as a trader, e.g. Have a realistic view of trading. First of all, in reality, things don’t often transpire as we want. Don’t forget that you can’t control everything that happens to you in life. Accept that time moves at the speed of time and not at the speed of your expectations. Accept that the markets cannot be forced to give you profits; you simply need to do the right things as a trader, and profits would take care of themselves. That’s patience. Study the secrets of market wizards and learn how you can trade less anxiously and more patiently. In time, patience can become a quality that comes naturally to you.
Conclusion: Most persons would attain their goals in life if they learn from their initial errors and try never to repeat them again. With step by step assimilation of the realities of their chosen endeavors, they master their various careers. The problem is that, most persons don't apply the principles of success to their speculative activities. They approach trading with levity. They simply dash into trading and see it’s not that easy. They may stay away from trading briefly, only to come back and experience the same results, repeatedly. During this experience, they still fail to use it as leverage to trading mastery. They can use that experience to become astute speculators. Can that be the best thing to do? We approach university studies and professional courses with utmost seriousness, persevering in spite of obstinate hurdles. We approach highly competitive sports and other forms of commercial activities with staunch determination and unflinching commitment. But we tend to approach trading with levity. Trading is a very serious profession which we should approach with staunch determination and unflinching commitment.
A quote from Richard Russell ends this article:
“And if no outstanding values are available, the wealthy investor waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn't mind waiting months or even years for his next investment (they call that patience).”
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