Lesson Three: Patience

Thank you to the members who posted the feedback. I'm glad you are enjoying my contribution.

The third lesson on patience is in my opinion one of the most important to master. In fact, I would say that without it you will never become a truly successful trader. Unfortunately, most people suffer from a serious lack of it.

The good news is that patience is a skill, thus it can be learned and improved. Some people are naturally more patient than others, and I believe those people also make naturally better traders. However, anyone can improve their patience, if they are willing to work at it. Skills only improve through practice, practice, and more practice. The Taoists have an expression. "Some practice is better than no practice. But more practice is better than less practice".

So how do you develop patience? How do you learn a skill that many people believe you are either born with or without. The best way in my humble opinion
is to take time away from trading and practice things that are naturally calming. Tai Chi, Yoga, or meditation will bring calm and patience into many other aspects of your life. The main idea is to take time out of your hectic schedule to slow down. Fishing is another great example of the type of activity that causes you to slow down and develop patience.

Patience is only part of the puzzle, but I believe that once you put that piece in place, you can at least begin to see where the other pieces fit. Consider patience as being the center piece that you build everything else around.

There is a popular English phrase that states, "good things come to those who wait". While I can agree with that statement to a certain degree, a person, particularly a trader, needs to know when it is time to act. That is why I think the Tao Te Jing, perhaps the most famous of all Taoist texts, does a better job of outlining patience in regards to trading and even life in general.

The Tao Te Jing talks about patience in Chapter 15.
Do you have the patience to wait
till your mud settles and the water is clear?
Can you remain unmoving
till the right action arises by itself?

A trader can learn a lot from that verse. Most traders enter without their minds being clear and focused. They enter on a whim, because they are impatient and cannot wait for the trade direction to become clear. If you cannot easily tell in which direction price is trending, don't enter! Wait for the mud to settle and the water to become clear. Wait until Price moves to a logical entry point.

So the Tao Te Jing teaches us that if we wait the right action will arise by itself. In trading, I think this means waiting on the sidelines when trend direction is not clear. Let the big dogs fight it out. Once either the Bears or Bulls have won, just take the wave for a nice easy ride. It becomes very easy when you learn how to find the flow and stop fighting yourself.