In the Forex trading market, not losing any money is just as good as earning some. This is a hard concept for new traders to grasp. Yet think about the old adage; “a penny saved is a penny earned” and how much truth is behind that.
If you patiently hold onto the money in your account until all the chips fall into place you have a better chance of building your portfolio then if you are just rushing into any seemingly good deal that crosses your desk. Learn how to be patient and wait, and you will find that the wins far outweigh the losses.
Guest post by Casey Stubbs of of WinnersEdgeTrading.com
Admit You Have a Problem
Anyone with a vice will tell you the same thing. You can’t change something in your behavior until you come to terms with how it is hurting you, either personally or professionally. Impatience is a character flaw that does not work in the currency exchange market. Once you can accept that and admit that this is something you need to work on, you can begin to change your trading strategies for the better.
Think Before You Invest
The need for patience when you are trading in the Forex market comes at all points of the trade. Too many traders get so high just having their money out there that they will make the investment, even if it is not the ideal set up. This type of emotional trading usually goes against their strategy and will cost them in the end.
This happened to me my first year in the Forex market. I had a good run with four successful trades in a row, and just jumped head first into the next without thinking it through. The rush of my previous victories clouded my judgment and I almost lost everything I had gained in four trades in that one. Instead of chasing the high, I should have patiently reviewed the set up and waited until it aligned better with the strategy I was using at the time.
It makes no difference if you just opened your trading account yesterday or if you have been at it for years, each trade you consider needs to be analyzed carefully before you jump in. It is better for you to miss out on an opportunity because you took your time to assess the risk to reward ratio than it is to lose it all because your impatience led you to invest without doing your homework first.
Wait For the Right Moment
Just because the Forex market is open 24/7 doesn’t mean you should be trading that way. A novice will spend his days and nights entering and exiting trades, making adjustments and losing his money hand over fist. Once you learn patience with Forex trading you will come to the realization that there are some times when it is just best to sit back and wait until the time is right.
It is good to keep analyzing the market and adjusting your trading plans accordingly, but wait until the market is working for your particular strategy before making any investments. Be like a crocodile, lie low and pounce at exactly the right moment. That basic survival skill works with trading too.
Let It Ride
This point cannot be stressed enough. You spent months refining a strategy and hours analyzing the risk to reward ratio of your latest investment opportunity before formatting your plan. Now you have to have the patience to see things through. Again, it’s that newbie’s need to constantly be adjusting, putting in and pulling out that gets them into trouble.
Look at the progress as much as you want, but don’t do a thing until the goal you set in place has been met. This is not an easy skill for a novice Forex trader to master. Their impatient mind is always on the next big thing and will pull their money out of a trade without seeing it through. Only to turn around and right away get involved with a new one.
I speak from personal experience when I tell you that this is the losing method to Forex trading. Have the patience to trust your initial instincts and follow your plan all of the way to the exit strategy. There is no worse feeling than pulling out early only to find that the currency shot up immediately after. You took the time to set your plan, now have the patience to let it run its course.
Don’t Trade When You are Hungry
You have heard that you should never go grocery shopping when you are hungry. The same is true with FX trading. The worst possible time to enter a trade is when you are feeling desperate for a win. This will cause you to react poorly and make decisions based on your current needs, not the current trends.
If you have a series of bad trades, pull back and re-analyze your strategy. Take a break from the numbers crunching and instead focus on where you made the mistakes. Use the time to develop a stronger, more effective strategy for the next round. Once you have developed the patience it takes to do this, you will find that your results will start to turn in your favor.
Empires are never built in a day. Once you have a firm grasp on that mentality you will see that your account grows strong and steady. There is no need to make large profits immediately, instead use your time to build your skills and gain experience. In this manner you will make the profits you want over the long run.
Casey Stubbs is the founder of WinnersEdgeTrading.com which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.
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