Trading is frequently seen as a thrill-seeking endeavor where traders eagerly await the optimal moment to enter a trade and then experience escalating tension as they await the outcome. However, this portrayal is far from the ideal approach to trading.

When trading turns into a thrill-seeking sport, it represents one of the most detrimental situations a trader can encounter. If a trader is opening and closing positions under stress or with anxiety, there’s a high likelihood that their trades will end in losses. Even if a trader starts their journey on a high note, feeling extreme joy or even euphoria from early profits is not the appropriate response. In fact, the exhilaration from winning trades can intensify the despair and frustration from losing trades, leading to increased anxiety and a higher incidence of errors that can ultimately lead to account ruin.

Not Exciting, But Effective

Many seasoned traders who have reached a point where they can consistently generate profits often face the opposite issue: they find trading monotonous. This complaint, however, should not be a problem in practice because even if things don’t go as planned, trading is a long-term process of learning, educating oneself, and improving. There’s always something to capture a trader’s attention, whether it’s learning new strategies, recording trades in a journal, or analyzing executed trades.

Trading can indeed be likened to fishing. Seasoned traders understand that trading is largely about waiting for the right signal, making patience a crucial prerequisite for successful trading. When a trader feels compelled to make a trade every day without fail, they often do so without a strong signal, actively seeking out situations where they believe the signal is present, even if it’s not. This is akin to a fisherman who, desperate to catch a fish, pulls up his rod at the slightest nibble.

The Importance of Preparation

Another crucial factor in curbing impatience is not to undervalue the importance of preparation. If a fisherman goes fishing with a flimsy rod and thin line, hoping to catch a large pike, they’ll likely be surprised when, after a struggle, the pike escapes with the line snapped.

Similarly, traders should not underestimate the preparation for their trading day. Establishing the right mindset, identifying key support and resistance levels, and possibly plotting the previous day’s closing prices are all part of the process. While everyone has their own routine, some level of order and routine, including adherence to a daily regimen, is essential for any successful trader. To some, this may seem tedious, but routine is indeed one of the cornerstones of successful trading.

The Myth of Daily Big Wins

Some traders also suffer from the expectation of landing a single trade that will provide nearly all the returns for the month or other trading period.

The issue arises when such a trade does not materialize, leading traders to become frustrated and impatient, often holding onto unprofitable trades for too long, trades they should have closed earlier with less profit (in the worst case, they end up with an average profit that turns into a loss).

It’s similar to a fisherman who sits by a pond every day, dreaming of catching a two-meter catfish after a long battle, earning the envy of all his friends. His frustration grows with each subpar catch, yet it’s entirely unnecessary. Such a catch may never come because, in both trading and fishing, luck plays a role that we cannot control. And we certainly should not rely on such luck.

However, on a more optimistic note, if a trader/fisherman does everything correctly, does not underestimate the preparation, and can wait for the right opportunity, the likelihood of such a catch/trade increases. It just requires a great deal of patience. Trade safely!