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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.

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