“The stock market is a device for transferring money from the impatient to the patient,” said Warren Buffet. And given his remarkable experience and portfolio, very few could really question his ideas and opinions.
Indeed when looked at the stories of all the successful stock traders, one could easily outline the subtle (but very important) truth that lies way behind the mainstream perception of extraordinary financial and technical knowledge. One of the biggest factors behind the high-flights of these individuals isn’t what they know—it’s their patience.
The most rewarding of all qualities
Patience is virtue. It’s as true as it gets—at least for the stock traders. When trading, being patient comes with a range of benefits that further spirals to add to your riches by making your trades return with optimal value. If you don’t already, here are 3 high-rewarding reasons why you should be a more patient trader:
- To get the best trading setups– Stock market is ever changing with uncertainty always clouding it. This makes indentifying the setups that has positive expectancy difficult. To hit the bull’s-eye and optimize the returns (without being the victim of analysis paralysis), one must wait… wait for the best trading setups to pave them the right way into the market.
- Prevent overtrading– One of the biggest challenges of new traders is to overcome overtrading. In their hastiness and ‘stock market lure’, they end up trading more times in a given period than required—be it to make more money or to recover losses. Needless to say, this ends up hurting them. When patient, this problem never exists.
- To make right analysis– Evaluating others’ performance and analyzing your own is an important part of trading. And it’s also only one part of the process. Learning and implementing what you got in your analysis in your next trades is equally crucial. All these combine to make the process a bit longer. Meaning, you need time and the patience to get better and efficient in your trading.
Of course there are plenty more direct and indirect ways how being patient make you a better trader. Now you know the why part, let’s talk about how. Here are 5 steps how to trade with patience:
Avoid taking the unnecessary risks. (Here are 5 unbeatable risk management tips)
Learn stress management. You will establish counters for your impatience.
Have a definite trading plan—and trust it till the end…
But also know when to be flexible. Be flexible in take-profit, stop-loss positions. Don’t be stubborn.
When plans aren’t working well, take deep breathes. It might sound very clichéd but the tip never fails.
When looking to be a part of stock market for long and build a sustainable portfolio, being patient will take you a long way. So yes, take care of all the technical aspects to make your trades right. But also remember, there are other important things that require just as much of your attention, like patience.