In a Patient State of Mind

Have you ever sat staring at your screens and thought about how you wanted the price to move. Perhaps you anticipated the price moving $1 in the next week. You stare at the screen and think, "It isn't moving at all. What's going on?" Staring at a stock price on the screen and hoping it will move can be like waiting for a pot of water to start boiling. It cannot happen fast enough and you start getting agitated waiting for something to happen. Unfortunately, watching a stock can also be like sitting in front of a slot machine, and trying not to put in a dollar and pull the handle. You have to fight the urge to make an impulsive, potentially losing trade. Trading requires patience and discipline. The only thing an impatient state of mind will do for you is make you feel frustrated. It's vital that you calm down and wait.

Many times, the key to patience lies in monitoring what psychologists call, "self-talk." Whether we are conscious of it or not, we often have a dialog with ourselves. When you are driving, for example, you may unconsciously tell yourself, "I'm going to slow down, watch out for oncoming traffic, and make a left turn." In addition to running through instructions on how to accomplish the turn, you may also have a soothing dialog that keeps you calm and alert, such as, "I can do this easily. I've made a left turn safely a hundred times. I just need to calmly wait for an opening." The same sort of dialog happens while you are trading the markets. You may think, "I"m going to buy at 80, wait for it to hit 83, and sell." When you are impatient, though, you tend to engage in an unproductive dialog: "I bought at 80, and I absolutely need it to move to 85. When is it going to move? It should at least be at 81 by now. What's going on? Maybe I'm wrong. Maybe I should sell." You cannot fo rce a stock at will to move according to your expectations. You must be patient, but when you are feeling pressure to perform, your self-talk becomes unproductive. The little voice inside you starts making unrealistic demands. You start to believe that you absolutely must see a price change. Unfortunately, you can only go where the markets take you. You must follow their lead. It is vital to remain calm and patient, and the best way to remain calm is to monitor your self-talk and change it when it becomes demanding and impatient. When you are feeling frustrated or impatient, start thinking calming, optimistic thoughts, "I am going to go where the markets take me. This is just one trade among many. There is nothing to get worked up about. I'm just going to calm down and accept whatever happens. It will be all right in the end." It is important to always remember that all you can do is try to do your best. After that, it is essentially all up to fate. So rather than get yourse lf upset, calm down, relax, and get into a patient state of mind.