Traders profit when they make good trades, not from the time they trade. It is easy to trade often to try and accumulate more profit, but this approach can lead to losses. To be a profitable trader, patiently waiting for the right trading opportunity is essential.
Losses will reduce your account balance and, with it, your confidence. Therefore, you should only trade when you see an opportunity.
Below is a list of tips to help you patiently wait for your trade.
Take regular breaks
Although it may seem surprising, breaks are a vital part of the trading process because trading psychology is the key to trading. Being mentally balanced allows you to make favourable trading decisions and avoid dangerous trades.
Excessive trading means that trades are repeated one after another without a break, and there is no time or space to reflect on your trades. As a countermeasure, we should shorten the time we spend watching the market. The less time you spend watching the market, the more you will be able to avoid overtrading. As a general rule of thumb, one or two hours a day should be sufficient time for chart watching. Spending more than that time looking at the charts is not recommended, as this will lead to overtrading and accumulated losses.
Surfing the internet
Once you have a trading plan, the next step is waiting for the entry point. According to the trading plan, it is essential to wait for the right moment to enter the market. If you enter at a point that differs from your plan, you will be less likely to make a profit. To avoid this, you relax by surfing the internet while waiting for your entry point. Then, while checking the chart movements, be ready for the right moment to enter the market.
Think of trading as a business
When working, your performance is analysed and reported. We should think of trading in the same way. Trading is not just the process of opening and closing a position. Before opening a trading position, we must make a trade plan and trade according to it. After closing a position, we look back to see if we executed according to the plan and find areas for improvement.
Businesses follow a plan, so taking actions outside the plan will reduce the chance of long-term business success. If we were to translate this into trading, we could incur a significant loss. Thus, patiently waiting for your trade should be considered part of trading.
Regularly review your trades
If you feel that simply waiting for a trade is a waste of time, you can use the waiting time to review your trading history. It is efficient to use the waiting time to improve your trading. By examining the results of past trades, you may be able to remember points you need to pay attention to enhance your trading performance.