The Definitive Guide on Patience in the Markets
If you're like me, you're probably tired of hearing the same cheap advice over and over again. We hear ALL. THE. TIME.
To be a successful trader, you need to sit on your hand!
YES, WE KNOW ALREADY!
That sort of tweet, post or YouTube video does nothing good for you. It's just feeding into your already destroyed dopaminergic system, and creating the illusion of reward. You're fooling yourself into thinking that you're learning something valuable, while, quite frankly, you're not.
You need to understand that 99.9% of people that are posting online want only one thing: your attention. Once they have it, they don't care whether you find their advice useful. If it "sounds good" to you, they've achieved their goal.
This is not an article on marketing or even on attention really, but I still want you to realize that until now, if you're reading this, it's because no one really told you HOW to be patient in the market. HOW to actually sit on your hands, and stop blowing your account in 4 days.
The Jade Master
In a remote village in the east of China, a young boy dreamed of becoming a jade master. He had heard tales of an old man who lived on the highest mountain and knew the secrets of the precious stone. He wanted to learn from him and make his fortune in the jade trade.
One day, he packed his belongings and set off on a long and perilous journey. He crossed rivers, forests, and valleys until he reached the foot of the mountain. He climbed up the steep slopes, braving the cold and the wind, until he saw a small hut at the summit. He knocked on the door, and an old man with a long beard opened it.
“Hello, I want to become a jade master. Can you please teach me?” the boy asked eagerly.
“Hmm… come inside,” the old man said.
The old man gave the boy a rock and told him to sit on the floor with him and have some tea. The boy thought that this was the beginning of his training, so he sat down and poured himself a cup. The old man then started to talk about how much he loved the birds that sang for him every morning, and how they were his best friends. He went on and on for hours, without mentioning anything about jade. Finally, he got up and said, “That’s it for today. Come back tomorrow.”
The boy was puzzled, but he decided to trust the old man and keep his questions to himself. He thanked him and left. He came back the next day, and the day after that, and the day after that. Every time, the old man gave him the same rock, made him sit on the floor, and talked about the birds. The boy grew more and more frustrated, but he didn’t dare to interrupt the old man or complain.
After a week of this, he couldn’t take it anymore. He stood up and said, “Master, please, enough with the birds. When are you going to teach me about jade?”
“Hmm… follow me,” the old man said, with a hint of irritation in his voice. He led the boy to his shed, where the boy hoped to see a treasure trove of jade. He still held the rock in his hand, and wondered if it was a special kind of jade. The old man came out of the shed with a broom and handed it to the boy. “Take this,” he said. “From now on, you are my disciple, and your first duty is to sweep the floor.”
The boy was shocked. He took the broom in his right hand, and the rock in his left hand. He felt like he had been tricked. He looked at the old man, who said, “What are you waiting for? Start sweeping.”
The boy obeyed, but he was angry and resentful. He swept the floor for hours, without seeing any sign of jade. He thought that the old man was a fraud, and that he had wasted his time and energy. He decided to leave and go back to his village.
He threw the broom and the rock on the ground and said, “I’m done! You’re a liar and a cheat! You only used me to do your stupid chores, and taught me nothing about jade! I should have stayed in my village and helped my father on the farm.”
The old man looked at the boy and said, “Young one, if you want to go back, you are free to do so. But before you leave, take this as a gift for your troubles.” He tossed another stone to the boy.
Catching it, the boy examined it and, after a few seconds, declared, "Who are you trying to scam? This isn't even real jade." The jade master smiled knowingly. "Your real learning begins now," he declared, ushering the boy into a new chapter of enlightenment.
This story is a parable that was told to me by my mentor Michael. It taught me a lot about patience, and the art of spending time on the charts, trying your best to figure out the logic behind the market, even if you're not sure if it's doing something. Your trading journey will very much likely resemble the young boy's journey, and you need to be prepared for it.
I need to stay honest with you, including this story in the secret scroll of patience was not necessary, but if you're not patient enough to read through the entirety of the page, your odds of making it as a trader are very slim. I want to congratulate you. Most people would have already stopped reading when they noticed that this is a 4,000+ word article. I promise that the rest of the secret scroll goes straight to the point!
Why Patience Matters
Before we dive into the HOW, I want to show you the WHY. What purpose does patience serve in trading? Do you even need to be patient? Can't you just trade whatever setup you see if you're good enough? Well, my friends, that's what I originally thought. I was lucky to discover the purpose of patience when I first bought my first funded challenge.
This challenge, ladies in gentlemen, was lost in 4 days... yes, you read that right. As you can see, I lost EVERY trade I took. That's 21 trades in a row. 21 trades in 4 days. That's the kind of results you'll have if you do not embrace patience, and work on that ability.
Trading is a game you CANNOT win if you are hasty. Business in general is a game you cannot win if you lack patience. The goal of business is to stay alive the longest. There is not "winning" in either trading or business, it's only a matter of who's still up at the end.
Think about people who run their first marathon. Is their goal to win the race? No! Their goal is simply to stay alive during those 42 kilometers of pain. That's your goal as a trader. You need to survive in order to thrive.
Different Kinds of Fortitude
Our first step to fixing your patience is to understand what it actually is, and under what forms it presents itself. There are two main kinds of patience in trading specifically:
- Macro Patience
- Micro Patience
The macro patience is the global quality you need to exhibit outside of your trading session, while the micro patience is the ability to stay composed within your trading session. This distinction is very important to make because people either try to try to fix only one of those two, or both at the same time using the same techniques, without realizing that they require different sets of skills and beliefs.
Macro Patience
As we said, the macro aspect of patience and fortitude has to to with everything outside of the actual action of trading. This is the first thing you want to master before even thinking of anything else. It all begins with this core concept of time:
You will not reach a high level of wealth in less than at least 2 years. Your
timeline for success must be farsighted.
That's what I call the "volte-face" of trading. You need to have a complete paradigm shift. And listen, that's the hard part: If you're 3 years into your trading journey already, but wasn't doing the right thing, or following the right path, you may have to add another 2 years of hard and painful work.
This is just reality, you need to fully accept it before you more forward. This is when your first assignment comes in!
1. Read this article.
2. Buy a planner, I recommend this one.
2. Grab a piece of paper and a pen.
3. Plan out the next 18 months of your trading career.
This assignment should unlock the long-term thinking skill, which is the first skill you need to master in order to become a successful trader. Think of it as acquiring the mind of a billionaire. Without this ability, everything else that you do in regards to patience will yield any results.
When you think about it, in every other job, business, or even education system, there is a clear and predefined road map, goals, objectives and clear metrics. Why should your trading career be any different? Why are you going in blind?
Readiness as a Trader
Now that you can think in a long-term perspective, we can move on to the next step: acknowledging the fact that you're not ready yet.
That's right! You're not ready to be trading just yet! You have other skills to work on. Think about this for a second, if you were studying to be a surgeon, you wouldn't start practicing on random patient while you're still in medical school would you? Right, you would have practice drills and exams you would need to pass before doing any kind of live surgery, because the risk is way too high.
Trading is the same! You're not ready until you have proof of being ready. A huge part of the reason I blew the funded challenge in 4 days was because I wasn't ready. That's actually the main reason people fail in this business. The difference between a trader and a surgeon is that no one will actually let a surgeon perform without being qualified. Unfortunately, in the predatory space of trading, people are often encouraged to "try it out" without being ready.
That's pretty and all, and that's where most people stop when it comes to this aspect, but HOW DO YOU ACTUALLY KNOW YOU'RE READY??? Don't worry, that's what we're going to go through together! There are multiple steps of readiness:
- Being ready to formulate a trading model.
- Being ready to paper trade.
- Being ready to live trade.
- Being ready to purchase a prop firm challenge.
So let's reverse engineer this.
- You're not ready to pass a funding challenge if you haven't traded live before.
- You're not ready to trade live if you haven't traded demo before.
- You're not ready to trade demo if you have no trading model.
- You're not ready to create a model if you know nothing about the markets.
Why do you expect to make 8-10% on a funded account if you've never actually done it in a live environment before? You should start with that! But before you open up a live account live a degenerate, do you even know if you can make 8-10% on a demo account? No? Well start there! But wait! Before that even, do you know if your strategy has the potential to make 8-10% over time? Do you have prof that your strategy is even profitable? No? Well you need to go back to the drawing board.
1. Pick up a pen and a paper.
2. Write down the proof you're going to need before ascending to each phase of the career planning you've written in the first assignment.
3. Work toward getting that proof.
Market Conditions
This is a little easier to understand, and very relevant to the current market landscape. Another aspect of macro patience is to know when NOT to engage with the market, and WHY not to engage at this specific time. For example, if you're a Forex trader, you're probably familiar with the daily maintenance known as the "rollover period" that occurs at 17:00 (New York time).
Every trader naturally avoids trading in that period because the spread goes all over the place and you can be heavily slipped. You should have a similar logic in your trading framework for market conditions that are unfavorable to trade in.
For example, I personally do not engage in the markets when the US Dollar Index is stuck in a consolidation range (see below). This is what I call "ugly price action". Patience is expecting that not every day, every week, or even every month is going to be a trading day, week, or month.
You need to wait for trading conditions, and only be trading then. Again, most people would stop there, without telling you HOW to actually enforce that rule. You'll need to understand the reason why this rule exists in the first place, and ingrain the belief that it is favorable in the long term, even if you see profitable setups form from time to time. This is where your third assignment becomes relevant.
1. In your trading plan, add a "avoidance rules" section.
2. Write down the specific conditions in which you will not trade.
3. Write down the rationale behind that rule. Why does it make sense to avoid those conditions? This should be specific to your own trading protocol.
Solving the Issue of Boredom
I can stay here all day pasting the countless messages I've received from traders on X/Twitter, and from my own private students who struggling with over-trading. From my experience, one of the most prevalent causes of over-trading is boredom.
Luckily, this is a quick fix! The main piece of logic we're going to work with now is the following: If you're bored in-between trading sessions, it's because...
- you are not taking your trading as a business.
- you haven't yet discovered other passions or interests outside of trading.
Let's explore the first option we have. When I say that you're not taking your trading business seriously, I mean that you're not doing everything you need to be doing in order to become successful. You want to make sure you have predefined periods during the day where you do other trading-related activities beside pushing buttons.
For example, every day, between 8:30 and 9:30, I perform my pre-market routine. That is still something that is necessary for me, but does not involve trading my live account directly. I then have specific times in the day, or in the week, where I do my analyses, research market trends, study other traders, refine my risk management models, update my psychological resolution system, completing my daily and weekly journals, and do all of the other trading-related fun stuff.
Being a professional trader is much more than logging into your trading platform and pressing buttons. There is a whole business around it. This is what I like to call the necessary "admin work" of trading. That's what you're fourth assignment is going to be on.
1. Pick up a piece of paper, and a pen.
2. Brainstorm the "admin work" that needs to be done on a daily and weekly basis. Write as much stuff as you can. You can take inspiration from the above list.
3. Filter your list by order of importance.
4. Block specific times of the day where you will perform those tasks.
5. Order Atomic Habits and learn how to actually stick to those habits.
Doing this should result in you spending more time refining your skills and preparing for the trading day than actually trading, and that's what we want. If you're busy with other stuff, you won't feel bored!
Passions & Hobbies
If waiting for a trade setup fills you up with boredom, you may suffer from what I like to call the "electronics disease". If you're someone who spends a lot of time on either your smartphone, your computer, or gaming consoles, you may suffer from this illness.
You feel empty inside, you have nothing that drives you, nothing you want to learn more about, or nothing you want to live your life around. This can't continue. Trading is a highly stimulating activity. If you have nothing else besides it, you will get absorbed by it, and it's going to be very hard to stay away from the charts. That's how addictions develop.
I won't go into all the science in this article, that won't help you. I want to stick the actionable advice. Electronic devices such as your smartphone made dopamine so cheap that you don't feel any motivation towards any other things, which results in you living in a passionless world. Quite depressing isn't it?
Well, I'm here to help you! For this assignment, you're going to perform dopamine cleanse. Do it, even if you don't think this applies to you. This issue is sometimes more subtle in some people.
1. In your planner, mark the next 7 days as "dopamine cleanse".
2. For those days, do not use your phone. Lock it away.
3. Pick up a book, any book. It can be fiction or non-fiction.
4. Go to your local café, and spend some time reading there.
5. Do not consume any form of sugar, or foods that contain sugar.
6. Listen to as many podcasts as possible on subjects you've never been into before. This is a good place to start.
6. Hold a journal, and write down what you enjoyed about the day.
I know that this sounds like a hippie thing to do, but trust me when I say that it has unlocked so many doors. Also, you can't trade during those 7 days. You really want to relearn how to derive pleasure from simple things like learning looking at beautiful things, reading, art, spending time with other people, having deep conversations, etc. This is ultimately what's going to take your mind off the market.
Micro Patience
Believe it or not, but we've solved the hardest problems. Macro patience was the thing that was probably holding you back the most, and now, the only thing that's left is developing the ability to wait for your setup when you're in the trading session. This, however, is the easiest thing to solve on our list. We'll do that in 3 easy steps:
- Define your edge.
- Define your trading hours.
- Journal.
Defining Your Edge
This step is first because without it, you can't perform the others. Defining is exactly what it sounds like. You want to have an extremely precise model with which you trade. Let's take UMOS for example, the criteria are very precise, and we have a clear execution path.
Why do we need that? Well, it will allow you to narrow your focus only on the setups that really matter to you. Contrary to what you may have heard from other traders online, this will by no means help you actually wait for the setup. There is a difference between knowing what to trade, and waiting for that thing to appear. They are two different skills. The next 3rd step of this section is really where you're going to see the difference, but we can't get there unless we do the two first.
Defining Your Trading Hours
You may have seen in the above screenshot of my calendar (by the way I use this awesome calendar app called Morgen you absolutely need to check it out) that I have set trading hours. You don't want to be stuck in front of the charts the whole day (unless it is for studying purposes). Personally, I set only give myself the chance to catch a trade between 9:30 and 11:00. Once we go beyond that, I close my trading workstation, and go on with my day.
You need to define the exact hours you're going to allow yourself to enter orders. Think about it, every business has operating hours, so why should you be different? You need that kind of structure in your trading. Your structure should answer the following questions:
- When does the game begin?
- What actions can you do while in game (your model)?
- When does the game end?
1. Define a trading model (this should already be done)
2. Define the time periods where your model works best. You ideally don't want to give yourself more than 2 hours.
3. In your planner, mark/highlight the exact hours you're going to be trading.
This assignment still does not answer the initial question: how do I become more patient? Sure, it will contribute to developing patience, but setting rules is useless if you can't follow them. This is what we're going to correct in the third and last step.
Journal, Journal, Journal
Yes, I'll say it again and again... a journal is the best way to actually get better at trading. Here, we'll see how exactly keeping a journal will help you with patience, and what is the best journal structure to have for honing your waiting skills.
I have a few types of journal for trading, but today, I want to show you the daily log. This journal helps me stay patient, because it keeps me engaged with price action without the need to press buy or sell. I need to write entries, note the time, look at charts, annotate, take screenshots, etc.
From the image, you can see what it looks like. It's a very active journaling style, and it it perfect for people who are struggling to wait for a setup because they feel this need to be constantly engaged with the market. This journal was the key to me unlocking the secrets of patience.
1. Find a note-taking software that suits you. If this steps takes you more than 1 day, use plain-text and whatever text editor you have installed such as Notepad or Notes(as I do), or simply use a pen and a notebook.
2. Write a journal template file, which you will copy everyday into a new journal entry.
3. Keep this journal open when you're trading.
4. Spend the next 30 days developing the habit of journaling.
Your Turn Now!
Congratulations, you've now completed the secret scroll of patience! You should now have everything you need to transcend your current trader identity and achieve new heights in your career.
Do not forget that the difference between the people who succeed, and the people will spend the rest of their lives in a miserable state is speed. As a teacher, I can assure you that those who will win in this business are the ones who are going to do every assignments in this letter. I'll be honest, if you don't even do the effort of purchasing the planner, your odds of success are extremely low.
Good luck,
And good trading!
end.
If after all of that information and specific knowledge, you still don't have the results you need, you may have a deeper issue, and I can help you on a more personal level.
Click here to apply to my one-on-one coaching program and we can get started as soon as possible.
Let's get you the profits you deserve!