The more I interact with our students or talk to other traders, the more this pattern becomes obvious and I believe that many more traders could be profitable, or at least closer to profitable trading, if they’d understand what drives their trading decision and bad behavior.
I sincerely hope that you read to the end of this article because it can potentially change your trading and your life for the better.
Although it sounds simple, ‘patience’ or a lack of patience is at the root of all your current problems and failures. In trading, a lack of patience is the single worst characteristic that will keep you from reaching your potential on all layers:
When traders are impatient, they enter too early, they act on FOMO and front-run the market. They don’t want to miss the signal and think that they could make more money by being smart and entering early. We all know how this ends and avoiding early entries is one of the first things that we try to overcome with our students.
You need to be patient when you are in a trade and you have to let your profits ride. Most traders are very impatient once in a trade and then mismanage their trades. Cutting potentially profitable trades short is a big problem for many traders.
- Account growth and patience
Most traders want to be rich and they want it NOW. Growing an account takes time and being impatient and trying to rush it always leads to account blow-ups. This is especially true for traders with smaller accounts and trading a small account is much harder because you almost have to over-leverage trading to make it worth your while.
Delayed gratification is the ability to resist the temptation for an immediate reward and wait for a later reward (1). We are faced with delayed gratification every day in our lives:
- Do we eat the amazing chocolate cake now or do we skip it and instead go for a workout to work on our dream body?
- Do you prefer a night out with friends or do you study for your big test in a few weeks that could help you get a good job long-term?
Younger people seem to struggle with the concepts of patience and delayed gratification the most. You want the nice car today, you want to fly first class to exotic locations and stay in private villas and you don’t want to wait 10 years for all that, while, right now, your life is very far away from your dreams.
The danger is that people who are trying to achieve things too soon, set themselves up for failure and in trading this becomes obvious quickly.
If you are 25 or 30 years old, you still have 50 – 60 years to live. Wouldn’t it make sense to then invest 5 or even 10 years into a proper education and make sure that you are on the right path instead of jumping from one system to the next, always trying to hunt a Holy Grail trading strategy, while blowing up trading account after trading account and not making any progress?
I get a lot of emails from people who have been following this exact path, often for years, without ever making a single cent in trading and without improving their trading skills. It’s often sad and sometimes even heartbreaking to read those emails from people have wasted years of their life.
Now imagine a scenario where you would patiently learn everything you could without trying to double your trading account every few months. How much progress could you make if you’d just focus on yourself, your skills and improving your trading strategy without worrying about making money for the next 5 years?
Most traders start trading and then plan to quit their job within a few months. This NEVER happens and you have to at least spend a few years before you can start making money – IF you approach it the right way and are dedicated and patient.
Wouldn’t it be worth it to delay the goal of having the dream life for the next 5 or 10 years if you knew that you had a much higher chance of achieving it, compared to how you approach your trading now? Get rid of the get rich quick dream and accept that this will take a LONG time and lots of patience. It’s definelty worth it but you need to get into the long-term mindset!
Ask yourself right now: do your actions and your approach reflect your goals? Are you professional enough? Do you deserve to be a profitable and professional trader and support your family with your trading?
To conclude this article, I want to share a video from Gary Vaynerchuck who has build multiple multi-million Dollar businesses and has a net worth of over 100million Dollars. His message fits perfectly in this article: