However, in the trading world, your ability to sit on your hands is a skill that most traders do not learn until much later in their lives. The need to see a return immediately gives them itchy fingers. This is especially true when very short-term day traders are involved. The thought of letting a trade run, isn't something that is taught widely. There are numerous organisations claiming to teach how to trade - but teaching someone when and where to press BUY or SELL isn't trading education at all! Any human can do that. Patience to wait on a trade comes from discipline. It is a trait that is learnt quickest by those who trade on the larger timeframes (240min, Daily, Weekly). They do not expect returns the same day and so they tend to live their lives free from anxiety about a position they hold. Something that also isn't taught by the “gurus”. The gurus stake big and exit quickly (then post the results for their zombies to drool over). As a beginner, I'd rather see an instructor who stakes small and returns big. That is more realistic. Enter 1 lot and return 300 pips. That is more attractive to me than 30 lots and 10 pips.
Traders that cannot practice patience suffer in the end. During my first few months trading, I became very much obsessed with green - the money I was making on the trade. I couldn't care less for the strategy that was in place, the risk involved or the lessons to be learnt. I wanted profit and I was seeing it. This meant that, at the first sign of danger, I was out. In profit, yes. But mediocre profit. Hardly covering my risk on the trade. I also ensured that I closed my positions before the session close. I didn't want to give even more money to the broker! How foolish. The money you lose (or sometimes gain) by holding positions overnight is far less than your gains! Trading on a higher timeframe, you do not have these problems. You aim for bigger targets (naturally), so your overnight charges are miniscule with the same position size. Whatever strategy you choose to employ, it must be able to tell you where to get in and where to get out (profitably, or not). Be patient enough to see it through.
I am not knocking traders who trade the smaller timeframes. But it demands a lot more screen time than I am willing to give. Once in a while, I may use a smaller timeframe to enter a trend if I find nothing on bigger timeframes. I may use it to add to positions. The problem is that it doesn't sit right with my lifestyle or life goals. And that's what is important. There is no point quitting your 9-5 if all you do trade 9-5. Sure, the money is good. You work for yourself. The money is all yours. But you are far from free. That is the key. Freedom. I find that people who want the thrills of trading are usually the ones who trade smaller timeframes with excessive lot sizes. They risk more of their account than is necessary, chasing mediocre returns. They don't last. If you must trade smaller timeframes, you must do so in a way that is disciplined and structured. If you're glued to your screen, every opportunity becomes a profitable opportunity.
The best trades are the boring ones. They move towards your target price without intervention from you. Like etching paint dry. The best traders don't let emotion interfere with their positions. They don't sweat a loss. They don't jump for joy when they hit their targets. A trade is nothing but a lesson to be learnt. A good trader sets up every trade to be a winner. And if it isn't, the trader wants to know why.
MYTH: Learning to trade from a profitable trader will ensure that you are a profitable trader.
False. Being profitable has absolutely nothing to do with your teacher. It all comes from you. Yes. You must be taught the strategy. The basics. But the mindset comes from you. Just because you have been shown how to perform open heart surgery on a patient doesn't mean you can. You must be able to handle the pressures of knowing you have someone's life in your hands. An error on your part can change the lives of many. Patience and perseverance whilst honing your skills are necessary. Traders who are successful are usually successful because they were patient enough to work on themselves and to work on the strategy until it starts to work. Most traders don't understand this. They pay ridiculous amounts for a 3-day or 5-day course and are eager to put their hard earned money to work. Only, they don't possess anywhere near as much discipline and perseverance as is required to survive - and they certainly haven't got the margin their teachers have to make the kind of money they do (yet they are taught to focus on £$€¥ rather than pips - stake size, rather than risk/reward).
New traders usually lack patience because they are sold the dreams of a flash lifestyle with luxury cars and high-end gadgets. They are never enticed by the freedom or the investment opportunities. They want the flash their instructors have but aren't necessarily willing to put in the years of work! Some even go as far as paying for specialised technology and multiple screens to give them more trading opportunities (not too long ago, trading was done in trading floors. Human to human. Something smells fishy). So I personally do not see any advantage in letting a computer programme tell you when to trade. Because when it fails, you are never going to assume responsibility for the loss and there'll be absolutely nothing to learn from it! Naturally, you blame the computer programme!
To ensure they don't miss out on trades, some traders have 4 to 6 monitors and are aggressively glued to the screens like a control centre worker. That's not trading - that is slavery. Be patient to see your strategy come good in the long run and all you'll need is a screen (maybe 2), good internet connectivity, a trading platform you are familiar with, and a space you are comfortable in (library, bathroom, roof, café or even by the pool in the Caribbean - that's freedom).
Trade smart, not often. Be a sniper.
Again, I can be reached on the following: