6th January 2021
We're not in the business of forcing trades just for the sake of it. Our mission with TradersCorner is to "Promote Proper Trading Principles". Forcing trades does not fit into that mission. Rather, we should be patient to wait for the opportunities to present themselves and then act on those when we see them. That's what this write-up is about today - patience!
When it comes to patience, I saw a quote the other day that resonated with me. Unfortunately, I can't find the email/blog / Tweet that I saw it in, but it basically said something like this:
"The farmer who goes out at night to tug at his plants in an effort to make them grow faster goes hungry"
It resonated with me because it's the same in trading. If you try and force trades in an effort to accelerate the growth of your account, it's likely to result in a bad outcome. So don't force trades.
The market will present the opportunities to you when the time is right. You simply need to be patient to wait for those opportunities to present themselves and then act on them when they arise.
The one thing I can guarantee is that the opportunity flow doesn't stop. The opportunities may not be there every day, but they do come with enough regularity to make trading a fruitful endeavour. You just have to keep your eyes open to spot the opportunities when they present themselves and then act on them with the correct position sizing and risk management techniques.
That's the first part of being patient: Waiting for the opportunities to present themselves.
The second part of being patient is waiting for trades to work out. There's a famous quote by the legendary stock operator Jesse Livermore:
"Money is made by sitting, not trading"
What this talks to is not being overly active in your trading. Once you have spotted an opportunity, act on it and then allow it to play out. Don't fiddle with it. Don't "tug at the plants". Let the trade setup play out and wait for it to happen. Patience, again!
I began my career as a broker of Single Stock Futures. It was a great start to my career, but as I learned more about trading and I read more and more books about trading, I became more and more conflicted. There's a conflict between being a good broker and being a good trader. The reason is that a broker gets paid a commission every time his clients trade. So a broker is therefore incentivised to push his clients to trade as often as possible and as big as possible to generate the most amount of commissions.
On the other hand, successful trading usually requires less regular trading and smaller position sizes - exactly what the broker doesn't want from a client. I found this conflict more and more difficult to deal with in my life as a broker, and that was part of my reasoning for eventually leaving the broking world in 2009 to start TradersCorner.
I wanted to trade for myself, and I also wanted to assist other people to trade successfully. I figured there was a way to monetise "Proper Trading Principles". I'm happy to say that eleven years later, I'm still banging the drum of Proper Trading Principles and making a difference to our clients.
Be patient in the market. Be patient for opportunities to present themselves and be patient for those opportunities to play out.