“Genius is eternal patience.” – Michelangelo
The first rule of patience in trading is that waiting is trading, and that no position is a position. There are times when the most profitable thing you can do is to wait for your trade to setup, and to pass on a trade that does not setup.
The opposite of patience is FOMO, the Fear Of Missing Out. You wait for something to setup, you haven’t profited on your last few trades, anxiety is building to log a winner. You start thinking that you’ll cheat a little on this next setup, it’s taking too long, I need something to happen now, you compromise your principles and take something that has no historical edge.
Man, if I miss this trade, it’s going to run away from me, I’ll be sitting there watching it, calculating in my head the profit that I’m losing with every tick. Perhaps I didn’t react quick enough, maybe I missed the setup?
This is why we journal and review our trades. And it’s also why we record our mental state as well as the physical context of the trade. After review of a bad trade, one where we compromised our setup, we can see why we did that, we can reflect on why we acted before thinking, our mental mood, why we lost patience, and from here we can develop a remedy, a cessation to this ill feeling, the feeling or state of mind that got us off our game, to lose patience and make a bad trade.
So, how do we develop the patience habit. First let’s look at what patience is. It is the foundation for nearly every good habit, yet it is perhaps the hardest quality to cultivate.
Patience in trading means the ability to wait things out. It’s accepting that your long-term goals get their name because they don’t happen overnight. It’s taking a few minutes before you respond to new information, and accepting the fact that in order to achieve your long term goals, you need to keep cool “in the moment,” you need to concentrate on each step in your fundamentals of a good trade.
When we’re impatient, the impulse is to take shortcuts, which leads to sloppiness and bad decisions. Give it 5 minutes, or simply pause for enough time to let your mind examine alternatives. Not every trading decision will afford 5 minutes, but most will…test it, perhaps 3 or 2 minutes is the key to recalibrating and solidifying your state of mind and your response. Maybe you only need to count to 10, I dunno?
By giving yourself this “stop and think” time, will force you to reconsider your impulse, weight that against alternatives, and score them…then you can make the decision with greater confidence and conviction. Often times you’ll get a much better entry or exit.
Patience has long been a struggle for mankind, that’s why it’s called a virtue, because it’s so hard, and uncommon. But don’t think that way, it’s kind of elitist. The fact is that anyone can develop patience as a habit. You have to ingrain it in everything you do. Give yourself a rule for even the simplest things, that you’ll stop and reflect before you do.
Once you’ve ingrained this habit for the small decisions, start expanding it to your bigger tasks. It’s going to take a conscious effort before it becomes second nature, but once patience becomes part of your MO, you’ll find it reaping benefits in everything you do.
Here are some strategies that will help you become more patient.
- Tally marks. This is the first strategy, if you have real problems with patience: start by keeping tally marks on a little sheet of paper every time you lose your patience. This is one of the most effective and important methods for controlling an impulse — by learning to become more aware of it. Once you become aware of your impulses, you can work out an alternative reaction.
- Figure out your triggers. As you become more aware of losing your patience, pay close attention to the things that trigger you to lose that patience. Is it when your co-worker does something particularly irritating? When your spouse leaves dirty dishes in the sink? When your child doesn’t clean up her mess? Certain triggers will recur more frequently than others — these are the things you should focus on the most.
- Deep breaths. When you first start to lose your patience, take a deep breath, and breathe out slowly. Then take another. And another. These three breaths will often do the trick, as your frustration will slowly melt away.
- Count to 10. This one really works. When you feel yourself getting frustrated or angry, stop. Count slowly to 10 (you can do this in your head). When you’re done, most of the initial impulse to yell or do something out of frustration will go away. Combine this with the breathing tip for even more effectiveness.
- Start small. Don’t try to become as patient as Job overnight. It won’t happen. Start with something small and manageable. Look for a trigger that only induces a mild impatience within you — not something that gets your blood boiling. Then focus on this, and forget the other triggers for now. Work on controlling your temper for that one trigger. If you can get this one under control, use what you learned to focus on the next small trigger. One at a time, and with practice, you’ll get there.
- Take a time out. Often it’s best just to walk away for a few minutes. Take a break from the situation, just for 5-10 minutes, let yourself calm down, plan out your words and actions and solution, and then come back calm as a monk.
- Remember what’s important. Sometimes we tend to get upset over little things. In the long run, these things tend not to matter, but in the heat of the moment, we might forget this. Stop yourself, and try to get things in perspective.
- Keep practicing. Every time a situation stretches your patience to dangerous thinness, just think of it as an opportunity to practice your patience. Because that’s what it take to become patient — practice, practice, more practice, and even more practice. And then some more. And the more you practice, the better you’ll get. So cherish these wonderful opportunities to practice.
- Visualize. This works best if you do it before the frustrating situation comes up. When you’re alone and in a quiet place. Visualize how you want to react the next time your trigger happens. How do you handle the situation? How do you look? What do you say? How does the other person react? How does it help your relationship, your life? Think about all these things, visualize the perfect situation, and then try to actually make that happen when the situation actually comes up.
- Remember that things can take time. Nothing good happens right away. If you expect things to happen at the snap of your fingers, you’ll get impatient every time. Instead, realize that things will take time, and this realization can help your patience tremendously.
- Teach. This is something that helps me a lot. I remember that no one is perfect, and that everyone has a lot to learn. Be patient, and teach others how to do things — even if you’ve tried before, it might be the 11th time when things click. And remember, none of us learn things on the first try. Find new ways to teach something, and you’re more likely to be successful.
- Find healthy ways to relieve frustration. Frustration can build up like steam in a pressure cooker, and if you don’t relieve that steam, you’ll explode. So find ways to relieve that frustration in a healthy way. Punching a pillow, going outside to a place where you’re all alone and yelling, exercise, kickboxing … these are just a few examples. Once you get that frustration out of your system, you usually feel better.
- Try meditation. You can’t meditate in the middle of a frustrating situation, usually, but often meditation can help you to learn to find a center of calm within yourself. Once you learn how to go to this calm place, you can go there when you begin to get angry. Meditation can also help you to be in the moment, instead of always wanting to get to the future, or instead of dwelling on the past and getting angry about it.
- Just laugh. Sometimes we need to remind ourselves that no one is perfect, that we should be enjoying this time with our loved ones, and that life should be fun — and funny. Smile, laugh, be happy. Doesn’t always work, but it’s good to remind yourself of this now and then.
- Just love. Instead of reacting with anger, teach yourself to react with love. Your child spills something or has a messy room or breaks your family heirloom? Your spouse yells at you or is cranky after work? React with love. It’s the best solution.