Great traders are patient

In the book Market Wizards, Interviews with Top Traders, the author writes "many of the traders stressed the importance of having the patience to wait for the right trading opportunity to present itself".

I completely agree with the above statement, I have been trading for many years and I can tell you patience is one of the most important factors that lead to success. Why? Because there are many opportunities everyday but only a few trades have a high probability of success. Your task is to identify these high probability trades and be patient until they present themselves. They are the ones that will make you money.

Another situation in which patience is required is when you have a bad run. You've been winning consistently, suddenly it's no longer working, you give up. This is the wrong thing to do. Why? Because the market has the habit to trick investors into doing the wrong thing. The thing is, the market can trick you for weeks or months, making you believe that your system no longer works. In fact your system works and if you have the patience to continue trading your system, you'll be back on the winning track. It happens to every trader.

For example we have a system that makes on average 60 points per month (FTSE 100), it has produced good results consistently since May 2007 but in July it started to lose, see table.

As you can see the system lost money between July and September. Subscribers who joined in July were disappointed, many of them did not have the patience to remain loyal to the system for more than three months. The result? They quit at the wrong time, they were not patient so they will never know what they are missing. Since September the system is back on track, with gains of 125 points and the latest signal in December is already showing a profit of 80 points.

Too many people fail at trading because they do not have the patience to ride these adverse market moves which are completely normal. Temporary set backs are part of the game, you must accept them otherwise you will fail.

To learn more go to www.eyield.co.uk