By Darrell Martin
New or seasoned traders need to have a proven system or strategy, defined risk management and patience. Understanding the system is important. As traders bring all the indicators and rules into play, most will see positive results. Using the chosen system, including following the entry and exit rules, becomes paramount to having profitable trades.
When traders employ risk management skills, learning to protect profits and cutting losses, even more success is experienced. There will always be an occasional trade that doesn’t work out. However, following the rules of a system and not wavering in the risk management of the trades brings the most profitable trades.
Adding in the virtue of patience brings trading to another level. In the course of a normal trading day, the market will move up and down. It will not always move in the trader’s desired direction. However, utilizing the rules of the chosen system or strategy coupled with patience will help bring about the sometimes long-awaited results.
Suppose almost all indicators in a system or strategy point to entering a trade, except one. The trader determines that it is close enough and has waited long enough so the trade is placed. As often happens, the trade moves against the trader for an immediate loss.
The trader has this happen repeatedly and finally gives up. Posted on social media is the outrage this trader feels for losing the trading account. “Trading isn’t fair! The brokers are simply out to take your money! It’s better to hide your money under your mattress or in a bank than risk it in the markets,” are some of the trader’s posts.
Was it all the market’s fault? Could some patience have prevented the losses? What about discipline for following ALL the rules of the system?
The markets will move. Sometimes traders feel that if they don’t enter a certain trade, they will be left behind. If all of the indicators or other aspects needed for the proper setup of the trade are not yet aligned, there is no trade. Trades cannot be forced.
Several traders have posted in the forum at Apex Investing how patience pays off. Sometimes patience is only needed for a few minutes. Those few minutes can feel like hours when waiting for the right setup! However, taking the necessary time to make sure all aspects of the trade are in place leads to a productive outcome.
One trader posted, “124 ticks on YM. Thank you, YM.” To that, another trader answered, “Took forever, but a beautiful run, Mike. Well traded.” Mike answered back, “Been waiting for it to make a move all morning… Patience paid off.”
[YM is a Nadex Instrument based on the Underlying mini-sized Dow ($5) Futures.]
Waiting for the right move and the proper set up paid off with 124 ticks! That’s worth the wait!
That is how it is with trading. Follow the chosen system or strategy. Make sure risk management is in place with no deviation of the rules. Practice patience. Wait for the correct setup. Sometimes it may seem a great deal of time is spent watching a computer screen. It is important never to force a trade. Patience will pay off.
Free day-trading education is available at www.apexinvesting.com.