The Most Important Trait of Profitable Day Traders | Bulls on Wall Street

The Most Important Trait of Profitable Day Traders

The ability to wait for the right setup. The best entries. The best exits. The right stocks. The right market environment. Developing your trading skills. All profitable day traders have this trait. Without exception.

Patience will make or break your trading career. Timing is everything in trading. You will never get the timing down until you develop patience in all these scenarios. 

Today we will talk about how you can improve and build patience in your trading so you can become more profitable:

Expectations

Patience all stems from expectations. In today’s world, everyone is a slave to instant gratification. Instant entertainment. Instant stimulation. Instant service. Instant responses. No one will wait for anything. 

Patience is defined as “the capacity to accept or tolerate delay, trouble, or suffering without getting angry or upset.” And in life. Every worthwhile outcome takes time. The need for immediate results is why so few people can trade for a living, or succeed in anything worthwhile venture.

 Losing weight. Building a business. Building muscle.  So few succeed in these ventures because they don’t have the patience or discipline to achieve the end goal, and don’t have the right expectations. 

Not getting a result immediately does not mean the process doesn’t work. This concept is why the obesity rate in the US is over 50%. Going to the gym regularly for one week won’t fix the problem. You need to be thinking in months. 

Having the understanding that worthwhile outcomes in life take time allows you to endure the setbacks without quitting. If all these things were easy, everyone would be successful and you wouldn’t be looking for answers. 

Let’s apply this to trading.

The Application

Once you have this understanding of how the world works, you will be able to apply these techniques to your trading. Your belief system has to be optimized in order to succeed. 

The best trades and home runs rarely happen in a few minutes. Usually, they take at least a few hours or days, assuming you have a momentum investing timeline-like us. Day traders often make the mistake of expecting positions to work in seconds. 

It’s not just the patience to stay in winning trades. The patience to hold your stop. Letting your trade play out. All just as important.  A lot of traders put on a position, watch it go slightly against them, and take it off because they think it means their trade thesis isn’t valid. Markets don’t move straight up or straight down. 

Wait for the Trade to Come to You

Everything becomes easier when you get the right entry. When you chase and buy too high, you immediately start a trade with negative emotions, cause you know you fucked up and shouldn’t be in. 

Whatever your system is, assuming it has an edge, wait for the right entry. Make a trading plan BEFORE so you know what you will do in every scenario once you are in the trade. Once you get the right entry, everything else becomes much easier. 

Scaling

We’ve talked about this strategy in past blogs. If you struggle with patience in your trading, scaling can help immensely with this issue. Scaling into a trade gives you time to see if your thesis is correct without taking a full-sized loss. Patiently build your position. 

It also allows you to stay in your winners much bigger. Here is an example of scaling in and out of a position:

most profitable day traders

You see how it can help you manage emotions. You take profits so that you don’t have to worry about your position reversing on you, and you still stay in a position to capture a bigger move. 

Summary

Manage your expectations. Overnight success doesn’t exist. Setbacks don’t always mean you’re on the wrong path. Look for progress. Be better than you were a month ago. 

Keep your expectations realistic on your trades as well. Use the strategies we talked about above. 

As Warren Buffet Says: ““You can’t produce a baby in one month by getting nine women pregnant” 

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