Patience
Many traders lack the patience needed to be successful traders. This is especially true for beginning traders. Many beginning traders and seasoned traders as well, get too caught up in the day’s movement. Traders often get overly excited or overly depressed about what happens during the day. Getting excited or depressed certainly is warranted when there is a significant move much more than normal. However, stocks typically move in an up and down fashion, and price swings from day to day are to be expected.
The key ingredient for patience is to have in mind what it is you are expecting from the stock. Predetermine your expectations before you ever pull the trigger on a trade. What are the reasons for entering the trade? Are you looking for a short term move to a support or resistance level? Are you looking for a strong longer term move due to strong fundamentals and a good trend? Part of the predetermination is to also consider when to exit if the trade doesn’t work out the way you expected.
When you consider expectations of your trade, both good and bad, you now are able to weigh out your potential rewards versus your potential loss. This really is critical in helping develop patience. If you set up trades that have great potential versus little risk, you are much more comfortable in letting a trade play out, as long as the trade stays within your predetermined parameters.
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