View Single Post
  #1  
Old 11-11-2009, 15:49
ForexGuy ForexGuy is offline
Level III Lasers Member
 
Join Date: Aug 2009
Location: Greater Kansas City Area
Posts: 62
Default Why wait? – Analyzing the Power of Patience

Why wait? – Analyzing the Power of Patience

Have you ever found yourself making statements like,

“I’ve got to make some money today.”
“I’ve got to get in this trade.”
“I’ve got to make a move.”
“I need to find some action.”

Is any of this sounding familiar?

For a lot of traders the urge to ‘get in the game’ can be overwhelming. An even more powerful urge can be watching a trade you are in go sideways and wanting to DO something about it. For minutes, hours even days you must sit and wait for the market to either move in your favor, or worse, against you. During such times a traders internal dialoged can be going crazy as he or she struggles with what to do.

You see, we must DO something right? If we’re just sitting at our computer and nothing is happening we must be doing something wrong….right? If there is no action in our trade that means we’re missing the action somewhere else doesn’t it?

Many, many traders get involved in FOREX with dreams of quitting their job, working from home and possibly making more money than they ever thought possible. We can encapsulate all of these ambitions into one simple desire, freedom. Freedom from a job that require us to keep regular hours. Freedom from a boss who tells us what to do and how to do it. Freedom from the fear of losing that job and having nothing. And most of all, freedom from financial stress.

The idea of ‘calling your own shots’ and ‘making your own rules’ is enticing to most traders. We are free thinkers, tend to be fairly risk tolerant, and tend to view money as a tool rather than a commodity. That’s why it might be strange to learn that these same traits can be extremely detrimental to your account balance.

You see, trading (when done correctly) can be quite boring. Sure working in the pits on an exchange or on a high risk trading floor can be exhilarating, but there is nothing exciting about watching your trade move sideways for minutes, hours or days. It takes a great deal of discipline to trade your system day in and day out. Trading requires you to be unemotional. Nothing kills an account quicker than an ego.

But these traits fly in direct opposition to our stated goal….freedom. When we fix ourselves to a set of rules and conditions we MUST follow, we are no longer free. Discretion (read ego) must be set aside. How many of you have purchased a trading system or EA only to second guess it at every turn? The desire to add your own bit of ‘human element’ (read ego) undoubtedly led to loss after loss. Maybe the system was junk to begin with, but how could you really know?

Another heavy contributor to our desire to trade comes from this concept of “time for dollars”. For many of you, trading is not your first carrier. It certainly wasn’t mine. Some of you have spent 10, 15 even 20 years in a carrier before moving into trading. For a large chunk of your adult life you equated ‘hours worked’ to ‘dollars paid’. The overwhelming desire to trade often comes from that unreasonable expectation that we must DO something in order to EARN our paycheck. We MUST trade. Because if we simply sit in our chair and watch the market without trading we have not EARED any money.

Traders, we are not in the ‘got to make money’ business. Our compensation is not determined by how many trades we take, or how long we spend in front of the computer screen. We are PAID (if you must use that term) for our discipline and sound decision making. This means that some weeks we’ll make nothing. On occasion we will lose money. But over time we are profitable because we have a plan we know works and we have the discipline to follow it.

People who have run businesses have an easier time understanding this than those that have not. You see, when you run a business there are days, weeks, even months when you won’t make one penny. You may spend 18 hours a day trying to build that business into something great only to see those efforts lost in the result. If we stop thinking in terms of Hours Worked = Dollars Paid we can shift our focus and our expectations from one of, “I have to trade.” To something more profitable like, “I have got to stay disciplined.”

Ask yourself a simple question today. Do I have an urge to trade because of some unreasonable expectation I have been putting on myself? If the answer is yes there are some simple things you can do to refocus your goals and change your beliefs. You have already begun to ask yourself more empowering questions, so you are one step closer to discovering more empowering answers.

Your Past Does Not Equal Your Future,

Jason Stapleton (ForexGuy)

www.4xtraderslive.com
Reply With Quote