The Most Important Quality of a Trader

Hello, friends! Like every forex trader, I periodically think: What are my strengths and weaknesses? How have I changed, and what qualities have I developed in myself? One of my strengths is the ability to delay making a decision. This is a very positive factor in trading. Today we will talk about how to develop it and take a short test - How prone are you to impatience?

But what does it mean to be able to "delay making a decision"? For me, it means handling things calmly and observing discipline. I should not commit rash actions this very minute and can wait for the right moment to act. This is equally true both for trading and for real life:

Such behavior, also called "delayed gratification," protects me from making hasty and emotional decisions. I would not be satisfied if I bought something rashly just to get the thing right away, but paid a high price for it. My attention is focused on the risk-to-reward ratio. Therefore, the risk of making a bad decision is relatively small.

I think that in our time it is not easy to simply wait. Sensitivity to consumption and a wide choice of offers make the process of refraining from buying something right away, without waiting for the right situation, more difficult. Due to the possibility of paying in installments, people can immediately buy expensive things. Many people spend money on ill-considered decisions and get into debt only because they cannot wait.

Several years ago I read Daniel Goleman's book "Emotional Intelligence." Among other things, he described long-term experiments with children who became especially successful and incorruptible if at an early age they learned about delaying decision-making.

The essence of the experiment was as follows: the child was offered a candy and told that he could eat it now, and if he did not eat the candy right away but waited twenty minutes, he would get 2 candies. So, those children who agreed to wait later achieved significantly greater success in adult life than lovers of "quick" candies.

But what does this mean for trading? I think delayed gratification has several positive effects on trading:

At present I have begun to notice that, first of all, I look for reasons NOT to enter the market. And only in the absence of any grounds preventing a trade do I open a position. The market no longer puts pressure on me, and I try not to fall under the influence of my emotions. I must wait for the proper setup and the right conditions. The emphasis is on first-class opportunities, not second-class ones and those that follow. You only need to wait for it...

One more point that is never talked about. This is forcing situations. Let me give an example: you have an open position and it has reached the stop loss. You want to win it back, and on the next signal you enter the market with a lot size 2 times larger. Another stop loss. You follow your emotions and open in the same direction with an even larger lot, without even waiting for a signal from your strategy. You probably already know the end of the story... This is exactly forcing situations, when you strive to exert some influence on something you cannot influence. I talked about this in more detail in the "Trader Transformation" training.

Instead of describing some self-evident conclusions from the above, I suggest a simple exercise that allows you to understand whether you have developed the skill of waiting or not.

Take an hourglass for 3-5 minutes (less is not worth it), turn it over, and simply watch how the grains of sand pour down into the empty half of the glass. Your task is to wait until the last grain falls down. Do not try to control your thoughts. Try it.

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So, after you completed the task, recall what thoughts and emotions arose in you while you were watching the sand. If you began to get annoyed by how slowly the sand was pouring, tried to calculate how much time was left, silently cursed this "stupid exercise" that does not let you sit on VK and look at cat photos, remembered how many important things you need to do today, or could not even wait until the sand poured into the other half of the glass at all - congratulations. You have problems with patience.

But if you calmly waited for the last grain, had no desire to speed up the process in any way, and simply watched the sand without emotion or irritation all the way to the end - YOU DID GREAT :) With patience, at least obvious problems, you do not have.

Respectfully, Pavel Vlasov
TradeLikeaPro.ru