Impatience in Forex Trading
The psychology of trading is an integral part of every one of us.
Markets are a kind of a living organism the development of which we try to analyze using rational approach, which creates a gap between the expectations and the final result.
In one of the previous articles, we talked about the difference between modesty and greed.
We learned that greed can not only be a good motivator that will get you better results but also a burning desire to have more, which may eventually lead to negative results.
Greed in its milder form means that one likes to take risks in the hope of getting greater profit and that one isn’t afraid of potentially suffering a bigger loss.
However, this personal mindset can sometimes unexpectedly turn into a contra productive stage, which is called impatience.
How does impatience harm us?
Generally, it is accompanied by the feeling of unrest, which can trigger an immediate reaction in case of untrained people. This behavior can be described as rash, and the main problem is that rash behavior based on a negative emotion has negative effects that are more likely to harm you than help you.
How does impatience show in trading?
The feeling of unrest doesn't come from nowhere. It is always a reaction to a primary cause. Imagine you are waiting for the price to reach a certain level before entering a trade and all the indicators suggest that it will soon hit the desired level, but it hovers around the same level for about an hour.
When you can't handle it anymore, you enter a trade under much worse conditions. Best case scenario, you end up with a lower profit, worst case scenario, the market turns against you.
How does the transition to impatience happen?
The example above isn't the only way impatience can look. Healthy greed often transforms into impatience when you're in a profitable trade, where you've set an exact Stop-Loss and Take-Profit order, but the price gets stuck at a certain point.
At that moment, your right index finger starts to tap instinctively, you start to grind your teeth together and start moving the SL and TP closer together.
When the price falls a little, you can't handle it anymore. You close the position with a lower profit, even though the market may turn direction in a moment and can move to the level of your original TP. This is not the case all the times of course but it is good to be aware of it.
So now we know that impatience is our little inner enemy who wants to have everything right now and who always has to get his way.
But this approach will never win in the market. But why is it that we are so impatient?
A couple of factors are to blame for this habit, but primarily, it is a type of comfort .
That is because we live in a time when can we access most information in a couple of clicks through a search engine, we can call anyone on the other side of the world and exchange news, and any time something interrupts this habit, we tend to react to the discomfort.
However, a rash reaction isn't going to get you good results. If we want to deal with the situation, there are a number of possibilities. They can be divided into two different approaches that allow us to make a change:
- Our surroundings (new technologies, Expert Advisors, and others)
- The inner self (see the article The 4 best ways to find inner peace when trading )
The quite unfortunate burden of today's world is that it causes the civilized world to keep moving faster, which brings along stress that we have to get used to. As a result, our mind always needs to be occupied and whenever it has to wait for something, it causes inner unrest and the already mentioned impatience.
As one Dutch saying goes:
"A handful of patience is more valuable than a bushel of brains."
May you have plenty of patience!
About the Author
Team Purple Trading
Purple Trading is a true and 100% fair ECN / STP forex broker providing direct access to the real market. High speed orders execution, no trade-offs, no limits for any type of trading, the most advanced trading technologies. Explore more about Purple Trading at www.purple-trading.com .
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P.M. Purple Trading is a trade name owned and operated by L.F. Investment Limited., 11, Louki Akrita, CY-4044 Limassol, Cyprus, a licensed Cyprus Investment Firm regulated by the CySEC lic. no. 271/15.