Patience and Discipline
Patience in the markets is important. This is an example of my lack of patience. I am running my iLi Automated Trader Software and generally, I am hands off. I don’t touch it unless I feel like I need to close a trade for some reason. I have a win streak of 43 trades in a row in the last 3 trading days. 99% of those trades were closed by the system itself. Last night I was entered into a buy of the EUR/NZD pair, which is one of 5 new pairs I added this weekend. So, it is my first time ever holding a position and I don’t know how the pair trades.
That being said, I was down a bit on the trade for over 12 hours. I decided to just exit the trade since it is early in the week, I have a profit goal that I am close to, and I figured I would get the loss back pretty quickly. All these excuses not to be patient.
I closed the trade and within hours the EURNZD pair went past the entry, and rose about 50 pips. If I had listened to my gut and trade sense and left the trade alone, I would have had a 44th winning trade. Even good traders fail at times. We convince ourselves that we should act, when the majority of the time, we just really need to be patient. I want to impress upon my students that patience is essential.
This trade is not going to kill me. It will be forgotten after this post. It just illustrates the value of being patient and sitting on your hands. People tend to think of trading as doing something. They may be used to their 9-5 day job where they need to always stay busy doing something. Trading is different. Part of trading is just backing off and letting the trade develop and complete itself. I will be more hands off. It’s perfectly okay to make mistakes and learn lessons.