If you are like most people, you want to make a fortune, and you want to make it now. It is a reasonable wish. Who wouldn’t want to make enough money to make all their dreams come true? But such a future-oriented focus is often the undoing of many traders. Making money in the markets takes time. You have to wait for ideal market conditions and you have to build up the requisite trading skills to take home huge profits. And if you are like many traders, it will also take time to save up enough capital to trade on a scale that can make you wealthy. If you are serious about making it in the trading business, you will have to learn to be patient.
Many people can’t wait to be rewarded. Depending on your style of trading, being unable to wait patiently can be a problem. For a long-term investor, for example, it is necessary to buy-and-hold long enough for a long-term strategy to play out. There may be minor fluctuations during the waiting period, but seasoned investors have learned to wait it out.
Most novice investors, in contrast, impulsively sell as the masses panic and buy the stock back at a top, which usually results in a losing trade. If you are a long-term investor, it is necessary to be able to control your impulse to make a profit and allow the price to rise over time. Even shorter-term traders, such as a swing trader, must fight the urge to sell early. Although trades are held for much shorter windows, a swing trader must know how to wait patiently for the optimal time to sell.
Trading expert, Dr Van K. Tharp argues that impatient traders tend to show a future-oriented focus. They dream of the profits they will make in the future, but at the same time, they desperately need them right now. Getting rid of impatience requires the trader to curb this future-oriented perspective and focus on the near future. Traders can become more patient by following a set of specific steps. First, it’s necessary to admit that you are impatient. This can be difficult to do. It’s hard to admit our limitations. One of the best ways is to make it impersonal. Pretend you are watching a television show about yourself. Pretend the character on television isn’t you. Watch how impatient you are.
See yourself as an objective observer would see you, and then, think about how you might change. Second, imagine you have two “tuning” knobs in front of you. Pretend that one of the knobs controls your focus on the future. If you turn the knob to the right, you will focus years into the future. If you turn it to the left, your focus will move closer to the present. When you are impatient, you are looking deep into the future. If you are extremely future-focused, you need to make an adjustment. Turn the knob to the left until you are focusing on the present. The second knob is the speed of your thoughts and behaviour.
When you are impatient, you are thinking too quickly and impulsively. Imagine turning the speed control down until you think and react more slowly. Third, realize that your impatience may be a signal that you need protection from the consequences of a trade, or trading, that you are afraid to face. When you are afraid of facing a potential loss, you may impatiently close a trade for fear of experiencing a bigger loss. It’s better to face consequences head-on.
Can you afford to lose capital on a series of trades? Or, are you making up dire consequences that don’t exist? It’s necessary to consider the consequences of your actions and decide if you can deal with them. Finally, remember times when you showed self-control and were patient. What did you do? How did it feel? Implement some of the thinking patterns and behaviours that helped you maintain self-control in the past.
Don’t let impatience thwart your long-term economic plans. Impatience can dash traders’ hopes for economic success. Without the proper discipline, you will make losing trades that will eat away at your account balance. By trading with patience, you can build up your account balance slowly and surely and eventually reach your economic goals.