Forex trading is one of the most liquid markets in the world with an estimated trading volume of $5billion plus of traded volume per day. One who employs a well learnt strategy, follows a set trading plan, shows perseverance, applies technical/fundamentals and exercises certain trading habits/characteristics can certainly become a profitable trader. However, trading and making money in the Forex Market doesn’t come so easy and it takes a lot of Hardwork, Time & Patience.
The Forex Market is dubbed by many professional traders as the ‘Beast’ because it’s very volatile due its nature. It’s a given fact that majority of the participants lose money (approximately 95% of traders lose money). According to pipburner.com, there are over 10 million active traders that participate in the market. That accounts for a large portion of FX traders that lose in the markets. The forex market is filled with traders who lack patience and in turn, drown in the stream of ineffective trading decisions filled with indiscipline.
Although patience is seen as one of the most difficult skill to acquire in forex trading, it’s a form of discipline that can be built and worked on over sustained period of time.
Trust me: ‘Patience is a virtue’
Having patience is sometimes seen as flaw by many entrepreneurs and businessmen. As the very nature of patience in this context is correlated to procrastination which is an absolute ‘NO NO’ is the world of business. But in reference to Trading; Patience is an absolute necessity and it equates to success if developed and applied properly. As a forex trader, if you have ever traded forex based on the emotions of greed and fear, you must have recorded a good number of failures in your trading career. Patience is all about putting emotions behind and sticking to a set trading strategy even when faced with an unfavorable trading condition or scenario.
When a trader doesn’t show patience
Especially when you first start out forex trading, your excited about making PIPS/profits and you put high expectations on yourself to make a certain figure every month. This added pressure on beginner traders creates a losing feat called the ‘itchy finger syndrome’. When trading with a live account you can place as many trades as you want some brokers such as XM allow a trader to have max 200 open positions at one given time as long as it’s within margin requirements of their trading account. What tends to happen is many traders have this certain goal of making certain pips a month (set out in their trading plan) and they become impatient and start taking multiple trades willy-nilly. Trading ‘Execution’ alone is regarded as a pillar of trading; it’s an Art. The ‘Itchy Finger Syndrome’ has happened to all traders starting out and it’s all part of the learning phase cycle.
Trading is like a Marathon- Endure the Ups & Downs that comes with trading
You have probably heard this many times. It’s very true, you have to stick at the hustle for a long time if you want any sort of success. If you look at all the traders you have accomplished so much in the field: Paul Tudor Jones, Nick Lesson, Richard Dennis, Ed Seykota etc. all made trading a lifelong passion. Patience is required all the time. A swing trader (medium term trader) for example, might have to wait to wait days and weeks for the right opportunity to be presented. A trading opportunity has to coincide with one’s trading plan therefore you have to be disciplines and patient to wait for the trade.
FOMO- Fear of MISSING OUT: Let the trade come to you
Trading the forex market is no joke, it’s very competitive and should be viewed as a long-term profession. For example, after the identification of a prominent entry point one should wait for the currency price to come to the entry point (these are classed as pending orders; either buy limits or sell limits).
Let’s say you had a long trade pending order for EURUSD at 1.1250. The downtrend was persisting and you were waiting for this trade to come to your desired price level. The pending order will automatically be triggered by your broker when prices reach that specific price level of 1.1250. Normally you should wait for price to come to this level as that entry price point was based on your trend analysis of the EURUSD. However, as stated before what happens is because you have fear of missing out on the trade you execute trade too early (let’s say at 1.1290). That’s 40 pips away from your desired price level. Because you’ve shown a lack of patience you are go into loss straight away as the price declines further towards your original price level. You have show patience and wait for trade to come to you; this is a very common pitfall amongst traders.
Characteristics of A Patient Forex Trader
Effective Trading Education
One basic characteristic of forex trading is gaining effective knowledge and education that relates to trading. Acquiring education is the primary goal of being a successful trader and it requires patience. When battling between making money quickly, take your time to gain effective education before you venture into the forex market. It is a successful trading habit.
Learn From Successful Forex Traders & Also Learn From Others Mistakes Early
Professional traders or successful traders have recorded increased profits in forex trading all thanks to patience. Don’t venture into the forex market without someone to guide you. Be patient and learn from those that are more experienced. Seek for trading advice, join their forex trading educational forums and follow specific rules and guidelines set by them.
Trade According You Your Trading Plan
In forex trading, plan in advance and be prepared. Be patient, don’t rush into the forex market without strategic trading plans because the market is filled with uncertainty. Plan every trade one step after another and trade according to the set trading plan. Traders who fail to plan come face to face with failure because of constant entry, exit and adjustment of trading plans.
Hence, traders should develop a successful trading habit by planning every trade strategically.