This article could have been called “Patience, A Trader’s Lament” or “Patience, The Key To Consistency” or any number of titles, but I wanted to bring it to your attention. And now that I’ve done it, I’m probably saying that you’re not trading what you I Am I supposed to? I’m a trader! The short answer is no, not necessarily. Sometimes the best trade is not to trade at all. Cash is, after all, a position.
I just got off the phone with a trader friend. We usually go over the previous trading day and let the rest of us critique our prospective trading styles. As a side note, if you don’t have a “trading partner” yet, I highly recommend finding someone with whom you can brainstorm and go over various strategies. It’s amazing how a different perspective will improve your trading results and give you insight into a different way of looking at the market. Do we always agree? No, we normally don’t. But it’s still important to get a second opinion about what you’re seeing in the market. Anyway, let’s get back to this morning’s conversation. I was telling him that I was a little frustrated that I only had one trade yesterday and even though that trade was a winner, I felt like I had left a lot of points on the table. His answer to me is really what trading is all about.
Did you stick to your business plan?
Did you stick to your business plan? That simple question sums up, in a nutshell, whether or not a trader is profitable. I’m not talking about being profitable for a day or a week or even a month. I have seen traders go for a long time, “trade in the zone”, without having any real setup or rules regarding how they took the trades that made them money. Once he loses that “zoned feeling,” he loses the ability to make money and becomes frustrated when he can’t figure out how to get back into the trading “forest.”
My response to my friend was that I had followed my trading plan to the letter and the criteria for placing a trade were simply not set. I went on to say that even though the strategies made good money yesterday, they just didn’t work today. His response to me was that one of the reasons he thought I was consistently profitable was the fact that I followed my business rules to the letter.
here is the lesson
As an experienced trader, you need to find a system that you are comfortable with. One that suits your personality and mindset. You have to look at your trading results over time. Don’t let day trading determine whether or not your strategy works. The worst thing a trader can do is get bored and feel like the market is working against him. It is at that time that the average trader makes mistakes. It is this mental strength that will ultimately make or break you in the day trading business. Read that sentence one more time: It’s mental toughness that will ultimately make or break you in the day trading business.
Thanks to my many trader friends who keep me level and focused on the keys to making a living in the business of day trading. So, to sum it up, find a system that suits your trading personality, abide by your trading rules, find someone you can brainstorm with, and most importantly, get mentally tough when it comes to trading. I hope this article helps you “catch a whopper”!
This is not a solicitation to buy or sell.
There is a risk in any investment.