Trader's most important quality
Hello, friends! I, like every forex trader, periodically think: What are my strengths and weaknesses? How have I changed and what qualities have I developed in myself? One of my strengths is the ability to delay decision making. This is a very positive factor in trade. Today we’ll talk about how to develop it and conduct a short test - How much are you impatient?
Patience in everyday life
But what does it mean to be able to "delay decision-making"? For me, this means handling things calmly and being disciplined. I do not have to commit rash acts this minute and can wait for the right moment for action. This is equally true both for trading and for real life:
- Wait until you get a good discount for anything you like to buy for a long period of time. After all, there are many things that seem to be needed, but their purchase may well wait until the seasonal sale.
- Many people get into loans to buy a new iPhone, or a car that they can’t afford in a good way. But if you replace mindless spending by waiting, you can independently save the necessary amount and buy a newer model. Another plus is that after a couple of months you may suddenly realize that you really don't need the very new iPhone ....)
This behavior, also called “delayed satisfaction,” protects me from making hasty and emotional decisions. I would not be satisfied if I bought something recklessly, just to get this thing right away, but to pay a high price for it. My focus is on risk to reward. Therefore, the risk of making a bad decision is relatively small.
I think that nowadays, just waiting is not easy. Sensitivity to consumption and a wide selection of offers complicate the process of abstaining from buying something immediately, without waiting for the desired situation. Due to the possibility of payment by installments, people can immediately buy expensive things. Many people spend money on rash decisions and get into debt just because they can't wait.
A few years ago I read Daniel Goleman’s book, Emotional Intelligence. Among others, he described long-term experiments with children that became particularly successful and incorruptible if they found out about the delay in making a decision at an early age.
The essence of the experiment was as follows: the child was offered a candy and said that he can eat it now, and if he does not eat the candy right away, but waits twenty minutes, he will get 2 candies. So, those children who agreed to wait, then in adulthood achieved much greater success than lovers of “fast” sweets.
What does this mean for trading?
But what does this mean for trading? I think that delayed satisfaction has several positive effects on trading:
- You must wait for the right situation and must refrain from reckless entry into the market.
- You must wait for the perfect setup, which will be executed in accordance with all the rules.
- You should not take profit too early, but you should calmly wait and close the position only when your rules allow it to be done. Some of our forum users have held positions for more than a year! I can’t do this)
- You must know firmly when you should not trade and when your individual trading strategy will not be profitable.
- You must control your risks in order to stay in the game.
- You should know that you can only succeed in trading in the long run and that you cannot quickly become rich.
Currently, I began to notice that I am primarily looking for reasons Do not come in to the market. And only in the absence of any grounds that impede trade, I open a position. The market no longer puts pressure on me, and I try not to fall under the influence of my emotions. I have to wait for the right installation and the right conditions. The emphasis is on the chances of the first class, and not on the second and forthcoming ones. You just have to wait for it ...
Another point they never talk about. This is a squeezing situation. Let me give you an example: you have an open position and it has reached a stop loss. You want to recoup and on the next signal you enter the market in 2 times a large lot. Stop Loss Again. You go about emotions and open in the same direction with an even larger lot, without even waiting for a signal from your strategy. You probably already know the end of the story ... This is the squeezing of situations when you are trying to exert some influence on what you cannot influence. I talked about this in more detail in the training "Transformation of the Trader."
Instead of a conclusion
Instead of describing some obvious conclusions from the above, I offer you a simple exercise that allows you to understand whether you have developed a waiting skill or not.
Take the hourglass for 3-5 minutes (it’s not worth less), turn them over and just watch how the grains of sand pour down into the empty half of the clock. Your task is to wait until the last grain of sand falls down. Do not try to control your thoughts. Give it a try.
So, after you complete the task, remember what thoughts and emotions you had when you watched the sand? If you began to enrage how slowly sand poured, you tried to calculate how much time was left, scolded to yourself this “stupid task”, which prevents you from sitting in contact and watching pictures of cats, remembering how many important things you need to do today, or even not at all managed to wait for the sand to pour on the other half of the hours - congratulations. You have problems with patience.
But if you calmly waited for the last grain of sand, you didn’t have a desire to speed up the process in any way, you just watched the sand without emotions and irritation to the very end - YOU'RE GOOD 🙂 You have no problems, at least obvious ones.