Nice to be back with you for the first time this year. Today you will hear some comments that involve an important step in moving your trading forward and that is treating your trading as a real business. We also take a look at the EUR/USD because it is at a very interesting level, as well as, the USD/CAD and the best way to trade it.
Patience is something we stress in the PM Preview and we are calling 2007 The Year of Control. Over the year we will be covering clearly identified steps to help you have the confidence to allow you to exercise patience and control in the Forex market- this is the key factor in the PM Preview maintaining a 90+% success win to loss ratio. We hope to see you there and we hope you benefit from the article below:
Winning traders show patience. They wait for ideal market conditions before entering a trade. And when they enter a trade, they follow their trading plan, even if it means patiently waiting for the right time to exit. But many traders are impatient. They impulsively jump into trades that they shouldn't have made. And at the first sign of danger, they sell. Why can't they wait? Trading experts suggest that it may be a matter of focusing on immediate gratification rather than waiting for profits to come after a realistic amount of time.
Dr. Van K. Tharp, for example, suggests that impatient traders are obsessed with profits. Rather than focus on what is required to trade profitably in the immediate future, they dream about how great it would be to spend future profits immediately. Similarly, Ruth Barrons Roosevelt observes, "Some traders are in a hurry. They want to make money, and they want to make it today." But profitable trading takes time and patience. How can you learn to become more patient?
First, it's necessary to admit that you are impatient. This can be difficult to do. It's hard to admit our limitations, but the first step in solving any problem is admitting that you have one.
Second, as you monitor trades, practice looking at events objectively. Pretend you are watching a television show about yourself. Pretend the character on television isn't you. Watch how impatient you are. See yourself as an objective observer would see you, and then, think about how you might act more patiently.
Third, realize that your impatience may be a signal that you need protection from the potentially harmful consequences of a trade. When you are afraid of facing a potential loss, you may impatiently close a trade for fear of experiencing a bigger loss. Rather than allow these fears to lurk in the back of your mind, it's better to face consequences head on. Can you afford to lose capital on a series of trades? Or are you making up dire consequences that don't exist? It's necessary to consider the consequences of your actions and decide if you can deal with them. If you know you can handle the potential negative consequences easily, you will feel calmer, and be able to control your impulses.
Fourth, examine the situations that preceded your impatient behavior and avoid them in the future. Identify the times when you were the most impatient. Were you tired? Were you hungry? Were you risking too much? Situations are powerful determinants of behavior. The best way to control your impatience is to avoid those specific situations where you are likely to act on impulse.
Fifth, examine your self-talk, which is the dialog you use to talk to yourself as you trade. Scrutinize your underlying attitudes and beliefs. People who are impatient want rewards now, rather than later, and their thoughts reflect this obsession. They think, "It's either now or never" or "If I can't get what I want right now, I never will." It's essential to identify these beliefs and refute them. If you find yourself thinking, "I must make a profit," or "It will be unbearable unless I make a profit," you will act on impulse. Similar beliefs are, "My hard work must pay off now" or "I can't wait any longer." When you notice yourself thinking such statements, refute them. Remind yourself that you can wait.
In "Overcoming 7 Deadly Sins of Trading," Ruth Barrons Roosevelt suggests supportive beliefs that can help you trade patiently: "Time is on my side. The market moves in its own rhythm, and I can move fast or slow depending on its pace. A person is able to create wealth slowly through trading." Don't give into the temptation to act on impulse. Trading takes time. Don't think that you absolutely must make profits immediately. Stay calm. You may not make profits immediately, and you don't need to, but if you build up your skills, and gain valuable trading experience, you'll eventually make the profits you want. It's just a matter of patience.---- Innerworth
Good Hunting,
Seth Gregory
www.forexmentor.com
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