Patience Is A Virtue In Forex Trading

The old saying "patience is a virtue" is as applicable to the profession of forex trading as it is to any

. The main reason why it is particularly difficult to maintain patience while involved with the market is that a trader must have enough discipline to wait for a setup that comes along which perfectly adheres to his or her trading method. Often times traders think they see a setup when it is nothing more than market noise or random price fluctuations that so often occur in any market. Having enough patience to sit on their hands and wait for a perfectly defined setup to form is really what separates professional traders from amateurs.

Another reason why many traders experience difficulty in maintaining patience is that they have no definable or written out trading method. Many traders use a conglomeration of techniques that involve multiple lagging indicators because they mistakenly think the more complicated their method is the more money they will make. Successful forex trading is all about simplicity, self-discipline, and patience, those three words sum it up as good as any. If a trader does not have a concrete yet simple and effective method to analyze and trade the forex market there is no way they can develop and maintain the patience to follow it.

Many traders do have effective trading methods yet still fail to maintain the necessary patience to calmly follow their method and wait for its edge to play out over time. All methods that are effective have some sort of edge in the market that ideally will provide a better than 50% win to loss ratio. When a trader starts deviating from their edge and trading from emotion to "get back" at the market or for any other host of emotional reasons, they are essentially nullifying their trading edge and might as well head to Las Vegas.

The ironic thing about patience as it relates to the world of forex trading and really trading any market is that, generally speaking, the more a trader waits for the perfect setup to form the faster their trading account will grow. The natural tendency for many traders is to think that the more they trade the more opportunity they are providing themselves to grow their trading account. The truth is that over-trading is the fastest way to blow out a trading account and if a trader does not develop the proper patience to sit and wait for perfectly defined setups that meet their criteria they most certainly will lose all their trading money and probably then some.

Lack of patience is probably one of the most dangerous and most wide spread trading mistakes that people make in the forex market, right up there with risking too much on each trade. Patience is a direct result of self-discipline; if a trader has the virtue of discipline than patience will be right there for the taking. Successful forex traders are usually extremely disciplined people in all aspects of life; this is why many ex-military people are great traders. The main reason why only 5 to 10% of market participants achieve consistent profitability is because human beings are emotional creatures and especially emotional when it comes to money. It takes a special mind-set to profit consistently in the forex market, one that can only be achieved through trial and error and intense introspection.

by: Nial Fuller

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