[/caption]
It’s only been almost 2 years since I began trading and I must say I am still learning how to trade. I have summarized the lessons learnt so far in my trading journey:
Be patient and wait for the best opportunity to place a trade
Trading is really a patient game. It is not as quick as I imagined in the first place. The duration of the trade can be short, but the time waiting to place a trade is very much longer. The thought of profits urges me to be involved in the market and it just makes the wait feels like eternity. Sometimes, the charts do not show any opportunity but my eyes will try to find patterns to justify for a trade. And true enough, these forced trades usually end up in losses.
Statistics have shown that market generally spend most of the time consolidating (non-trending) or moving within a band. To understand more, read “90 days attribute to 95% of profits“. This is why traders have to spend most of their time waiting!
Back on forcing a trade. What I was doing (and still doing) was to demand the market pay me profits. Who am I to do that? I cannot force opportunities. The wise Sun Tzu said, “to secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.” If I may rephrase, “to prevent losses in the market lie in our own hands, but the opportunity of making profits is presented by the market herself”. I have to be the servant of the market, to get paid when she decides to. I cannot expect to jump into the market anytime and reap gains out of it. It just does not work this way. If it does, everyone should just quit their jobs and make a living off trading. Waiting is perhaps the most difficult part of trading and if anyone tells you trading is easy is lying. The earlier you understand the importance of patience and the more you can practise it, the less you lose and the more you gain. Like what Warren Buffett says, “the trick is, when there’s nothing to do, do nothing.” Opportunities do not appear all the time. A good trader will wait for the best opportunity while an amateur trader will make a trade whenever he/she perceive there is one.
But the market is always uncertain. Call upon conviction Read more...
