Patience and Discipline are NOT a Substitutes for a Real Trading Plan 9 out of 10 traders know that they should be patient with their trades. They’re right. Patience is an important part of working a trading edge. However, the problem comes when these traders stop working their edge. They are patient not with their edge but with individual trades. The trade becomes the focus, not the edge. Winning trades are held too long in the hopes that they’ll turn into even bigger wins. Losing trades are held in the hopes they’ll rebound. Winning trades turn into losers and losing trades turn into catastrophes.
Patience isn’t the problem The problem isn’t patience. It’s that you’re being patient with the wrong things. All of this can be drawn back to and is rooted in your mindset around trading. If you believe that in order to be a successful trader you should optimize each trade, you’re destined to lose. Winning in the markets has absolutely nothing to do with winning one trade and winning the lottery doesn’t make you a trader. By trying to optimize each trade, you’re taking what could be a winning equation, injecting random variables, and turning it into a losing one. Think of it this way. Was Steve Wynn ($WYNN) worried when one gambler won or lost at one of his casinos? Of course not! His edge came from millions of gamblers walking through his doors and playing his games. All of his games favor the casino. He may have lost to any one of these gamblers but with millions walking through the door, he knew precisely the revenue his casinos would produce. For Stock Market Research, visit Smart Money Gains.
The Outcome of one trade is insignificant The same is true of professional traders. They know that the outcome of any one trade doesn’t matter. In fact, they realize that the outcome of any one trade has absolutely nothing to do with them at all! The outcome of each trade within their edge is completely random! Since the outcome of every trade is random, their egos aren’t tied to the results. It’s far easier for these pros to be calm. Relaxed. And happy no matter what happens.