Movies like “Wolf of Wall Street” and TV shows like “Billions” make trading look crazy, fun, and exciting. But in reality, trading is boring. So how do you survive when there are so many days – so many of them! – when nothing happens?
Trading is boring – be patient!
Well, you need to understand that trading requires a lot of patience. But sadly, far too many new traders think it’s going to be one action-packed day after another. They have little patience for learning or waiting. And that is what most traders do every day – learn and wait.
Staying engaged when “nothing” is going on is not an easy task. The market mostly moves in slow motion. But if you’re willing to learn how to read charts, spot patterns and wait for a great trading opportunity, you’ll have a much better chance of being successful. Pay attention, and get out ahead of a move.
And be realistic
You also need to be realistic.
Someone suggested to me once to take an annual goal, like earnings $100,000 per year trading, and break that down to a monthly, weekly, and daily goal.
On a daily basis, you would need to earn about $450 each trading day to reach the $100,000 level. Seems simple and easy, right? Just make a quick $450 and be done for the day. But how about the days when you earn nothing? Or the days you lose money?
That “easy” daily goal of $450 is actually a mirage, because trading is not linear. You don’t win every day – no one does! There are days you make $35,000, days you make nothing, and days you lose $15,000.
This understanding can lead you to get desperate and make bad decisions, like going “all-in”, betting more than you can afford to lose, or holding onto a losing trade for far too long.
Part of your success as a trader is understanding your limitations. Can you be patient enough to grind out a small gain and wait for the days when wins are bountiful?
Successful, long-term traders in stocks, options, futures, and commodities understand that trading is boring. They know that each day presents different challenges, and that some days they’ll lose money. That’s okay, because staying in the game is the only way you can take advantage of those magical trading moments.
