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Forex Trading Mindset – Patience & Persistence

In this day and age of instant gratification and vicariousness, people want thrills without risks, wine without alcohol, more money without effort, beer without calories and, yes, a profitable currency trade as soon as they can get it.

Look, if I could give you one QUICK piece of advice, in regards to this necessary mental skillset, it’s this: The forex market knows better than you and I when the time is ripe. Don’t rush it.

The successful trader realizes that patience pays! Every successful forex trader has a special talent for ‘watching and waiting‘ and waits until forex trading behavior has dictated when to enter the market. The prudent Forex trader specifically applies patience to his/her advantage by:

Listening To The Forex Market

The market is continually donating valuable forex information, and you must get into the proper frame of mind where you are in reality taking your orders from the action of the market itself or the signals your trading system is sending you.

Your judgment will become poorer from the very time that you decide you know more about the market than the market itself is telling you, and you throw patience aside and give in to fear or hope.

Sitting On The Sidelines While Waiting For a Forex Trend to Develop

It has often been said that looking at one’s screen during the online forex trading day is like sitting in front of a slot machine and trying to resist gambling. It’s hard. Just as the one armed bandit tempts recreational gamblers, the constant stream of quotes on a computer screen tempt seasoned and novice traders alike to make hasty trading decisions.

Successful traders in the FOREX have learned that they cannot buck the major price trend of the individual currency-pair they are trading. Or, even if you’re not a long-term or position/swing tradinf forex sailer, but daytrading, you still don’t want to let impatience cause you to trade against the short-term trend – buy on a micro-downtrend or sell on a micro-uptrend.

The successful FOREX trader will enter his/her trades in the direction of the prevailing trend or wait until a new trend is established. Several hours, or perhaps days/weeks, may elapse before this trend becomes apparent.

While patience is important not only in waiting for the right trades, it’s also important in staying with the trades that are working. Although trades are held for much shorter windows, as a daytrader you must know how to wait patiently for the optimal time to sell. Selling a winning trade too early is not going to allow your account balance to increase exponentially at an ideal rate.

This is where a the ‘persistence’ mental factor comes in as well. You can be ‘patient’ until the cows come home but if you don’t persistently control your impulses and don’t persistently follow your exit rules, then your profits won’t balance out losses overt time. As a famous trader William Eckhardt once said, “while amateurs go broke by taking large losses, professionals go broke by taking small profits.“

Be patient with winning trades; be enormously impatient with losing trades. Remember, it is quite possible to make large sums trading/investing if we are “right” only 30% of the time, as long as our losses are small and our profits are large. – Dennis Gartman (forex trader)

Related posts:

1. 7 Habits of a FOREX Winner!

Tags: frame of mind, successful traders, swing trader   Posted in Forex Trading Mindset