Becoming a successful trader will require both patience and persistence. In unsuccessful traders these traits are exhibited, but are focused in the wrong direction. When these traits, which can be learned, are applied in the right way, your odds of becoming a better trader dramatically improve.
How Unsuccessful Traders Use Patience and Persistence
If struggling, you may be using these aspects of yourself in the wrong way. Struggling traders typically have no patience in waiting for trades to come them, rather they chase prices, buy new highs and new lows, and basically end up with poor prices that reduce the amount of time the trade spends in the money.
This is done persistently, until the account dries up. Looking for an easy way to make money many traders stop thinking for themselves and blindly trust someone selling them something–a persistent theme throughout life. This is done over and over again, for years sometimes, until the trader finally realizes it is them that needs to start putting in the effort. There is no real work being done because with this method there is always have someone else to blame. Only once full responsibility is taken, is effort likely to pay off in trading.
There is also no patience when it comes to testing a strategy (and testing one’s own ability to implement that strategy) in a demo account. Instead a few hundred dollars is placed in account usually right away, before any testing is completed. This lack of patience usually results in a busted account.
Many traders are patient with losses though, for individual trades and in letting their account run dry. Losses are allowed to run (not applicable to European binary options), and traders will spend years losing money, telling themselves that their patience and persistence will pay off.
This is not true. If you persistently do the wrong thing, and don’t change, you will continue to get the same results you have been.
How Successful Traders Utilize Patience and Persistence
Patience is used to wait for great entries and exits. Trades are not impulsive or based on the emotion of the moment. Patient traders have studied charts and realize that prices move in see-saw patterns, so if you miss a trade there will be another one; prices aren’t chased.
A plan for trading is followed, a method which is implemented for every single trade (see: Anatomy of a Trading Decision and Creating a Trading Plan for guidelines). This is done persistently. No wavering. If the market doesn’t provide the exact trade setup outlined in the trading plan, then the trade isn’t taken. This takes patience.
At the beginning most traders begin with a small account. It is recommended that traders don’t risk more than 1% to 2% of their capital on a single trade. That way a string of losses, especially as a new unproven trader, won’t significantly draw down the account. This takes patience.
If you start with a $500 and account, and are placing $5 trades and winning, then with patience that account will grow. But you must stick with what is working. This is where persistence pays off. If you are making money with a small account, over time that account will get larger and eventually produce an income. Become impatient, deviate from your plan or risk more than you should, and your persistence won’t pay off—you’ll lose it all.
Notice the Shift
Successful traders utilize these traits in very different ways than unsuccessful ones. Unsuccessful traders have endless patience for losing trades and losing money, successful traders are patient on waiting for high probability trade setups.
Successful and unsuccessful traders are both persistent in applying their approach to the markets, except successful traders only become persistent if their method if it is working. Patience and persistence are required to come up with a working method, yet unsuccessful traders don’t really work to find or implement a working method. Instead they trade off tips, others opinions, and bounce from unproven strategy to unproven strategy.
Patience and persistence are used by the successful trader to grow an account slowly, following a solid plan. A persistent lack of patience drives the unsuccessful trader to make random trades, risk too much and not bother creating a plan, resulting in a drained account.
Successful traders realize that persistence is only beneficial if working off a model which is likely to eventually show positive performance and improvement. If a method is random, based on emotional and impulsive decisions, there is no way to know if performance will improve. This sort of random method should be abandoned; save your money and do something else with it.
Be persistent in finding your method and writing it down, patient with the market for good trade setups, and persistent in following your plan.