Skip to main content

PATIENCE

 “In this game, the market has to keep pitching, but you don’t have to swing. You can stand there with the bat on your shoulder until you get a fat pitch.”

—Warren Buffett

Patience enables an excellent entry point, which allows a trader to

 Gather a bigger position 

 Decrease his chance of being stopped out 

 Hold the position for a larger move 

Good traders understand that they will not be in every move. They wait for setups with which they are comfortable and confident. A strong stock that has moved well above a good risk/reward entry is left to run without them.

For example, if a stock is trading in a range, breaks out, and you miss the buying opportunity, well, that is one mistake. But if out of frustration you buy that same stock well above the range, you chase it, well, now you have made two mistakes. The first blunder will not cause trading losses (just an opportunity cost), but the second one will. Do not let one mistake cause another.

You can’t hit a home run without swinging.

Comments

Post a Comment

Popular posts from this blog

Maximizing Your Profits with Scoring

SETTING YOUR MAXIMUM INTRADAY TRADING LOSS First things first: set a max intraday trading loss. There will be days when you just do not have it. Why do you think coaches pull their players when they are not playing well? They are more harmful on the field than off. When you are underperforming, you are hurting your team and your trading business. You need a system to yank yourself over to the bench. A stop loss is your answer. TRADING BASED UPON THE TIME OF DAY A good trader makes note of what time of day it is, when he trades most profitably, and adjusts his trading to fit such times. Your numbers at the end of the month will not reflect your true trading potential. Make the most trades with the most size during the trading periods that statistically are most profitable for you. Money saved during your weaker trading periods is money earned. Consistency The fact is that most trades you make will start working for you right away. But the new traders also hold stocks that are trading ag...
Post a Comment
Read more
 Loss is painful, guilt can be devastating. Worse than losing one's dream is the knowledge that the loss was self-inflicted. Problems are solutions that have outlived their usefulness. Problems are pattern that were learned in emotional circumstances during one period of life and that now have taken an existence of their own. Many times, outdated solutions replay themselves in a variety of life situations, leaving people mindlessly repeating their mistakes in work, love, and trading. There can be no free will for people who are locked into patterns developed for past challenges. Successful traders are therapists both learn to do what comes unnaturally. The resolution to problems can be found in what people are doing when those problems are not occurring. The problem with many traders is not that they have problems, but that they are focused on their problems. It is this problem focus that prevents them from appreciating what they are doing right, that blinds them to solutions alrea...
Post a Comment
Read more

Wealth file #1 Rich people believe "I create my life" Poor people believe "Life happens to me."

You have to believe that you are the one who creates your success, that you are the one who creates your mediocrity, and that you are the one creating your struggle around money and success. Consciously or unconsciously, it's still you. Instead of taking responsibility for what's going on in their lives, poor people choose to play the role of the victim . A victim's predominant thought is often "poor me." So presto. by virtue of the law of intention, that's literally what victims get: they get to be "poor." That said how can you tell when people are playing the victim? Victim Clue #1: Blame Victims blame the economy, they blame the government, they blame the stock market, they blame their broker, they blame their type of business, they blame their manager, they blame the head office, they blame their spouse, they blame God and of course they always blame their parents. It's always someone else or something else that is to blame. The probl...
Post a Comment
Read more