A common trait that many good traders have is patience. Achieving patience is easier said than done. Some people are naturally patient and some really have to work at it. There are some definitions of patience that particularly apply to trading. One such definition is “an ability to suppress restlessness when confronted with delay.”
Many traders express restlessness when their trades are not making money immediately after entering a trade. Or even worse, would be their trades start losing money immediately after entering a trade. Part of the problem is society in general. We’ve been brought up in a world where we have to have things NOW. We buy things we want now instead of saving up money for it, because we are bombarded with credit cards and easy payments of only X amount of dollars a month. The use of the internet provides us with instant information that, in the past, might have required hours of searching in the library.
Part of developing patience is having experience. As we observe how things work, we can begin to realize that the majority of nice moves don’t occur in just 1 day, but take place over several days to several weeks. With experience, comes knowledge. As we gain experience and work to increase our knowledge, we have better perspective which leads to patience. Seek to continue your learning.
One other key factor in developing patience is to predetermine our exit points for our trades. When are we going to exit this trade? Is it a resistance level being reached? Is it only if the trend changes? Also, if the trade goes against us, at one point do we say enough is enough? The more we can answer these questions before entering our trade, the more patience we will have once in the trade.
A special item for option traders would be to make sure you have enough time on the option. If you aren’t worrying about expiration approaching, then it doesn’t matter if the stock doesn’t move right away.
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