Thursday, March 26, 2009

PATIENCE - Key to successful trading

As they say: "Rome was not built in a day".

Patience might be viewed from multitude of points. However in trading it translates into several most important points to be respected in order to build a sustainable trading performance.

1. Staying Power -- as Jay told me many times it's all about managing your position SIZE so you have the staying power to let your idea/scenario play out into the market.

I noticed that my performance tends to be tightly correlated to the Position Size I operate with.

As a self-educated trader my goal is to become a professional while following an approach based on a sound frame of rules for developing trading ideas and for managing my risk exposure to the level that I would preserve my capital while taking advantage of the high probability setups as they present themselves in the market.

The Key to sustainable success is Patience.
- Patience to wait for the setup.
- Patience to start small and test the market first, then add on confirmation.
- Patience to use Stops in a comfortable level where a random whisaw or spike will not affect my idea.
- Patience when I am very profitable.

>>> I'd like to leave a mark here of this phenomenon I observe as a psychological profile:
I tend to become overconfident once I pull out of the market a nice profit. Next day I always feel unsatisfied with little profit and want to achieve a better result. That makes me enter with larger position and once in the trade I become more vulnerable from psychological standpoint.
I like to describe this role as a Victim of its own Success. I tend to dislike and I'm working on correcting this issue as it tend to open a self-destructive spiral.
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I read Castaneda today (Tales of Power, 1974). Don Juan tells little Carlito that to be sebsitive and succeptible to Knowledge he has to be achieve a Personal Completeness.

This similar to the Concept of keeping Oneness and being Centered in Daoism.

And common sense people call it Peace of Mind... Patience and Peace of Mind are the 2 sides of the coin. Once you have stillness in your mind toy own a clear viewpoint. That translates into sound judgement and ignoring of emotions in the decision making process.
> It also makes the odds of being lucky higher maybe just because you DON'T PUSH YOUR LUCK.

As Lao Tzu admonishes in DaoDeJing the concept of non-action helps you achieve your goal 'effortlessly' - which means without rush or strain but waiting patiently for the parts of the puzzle to fall into place.

My Father likes repeating to me:
"Wise man said: Only fools rush in!"

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