Why you need patience to trade well
In this weekly video:
00:25 – Good trading is boring
00:50 – Trading examples from this week
01:57 – How do we trade these market conditions?
02:29 – Trading different time frame charts
03:19 – Live trading room webinar and examples shown to clients
04:04 – Don’t just look at one time frame chart
Having patience, as a trader, is one of the keys to your success. Let's talk about that and more right now.
Hi Forex traders, it's Andrew Mitchem here, the owner of the Forex Trading Coach, with video and podcast number 286.
Good trading is boring
Now, a statement that I like to make quite often is that good trading is boring. Don't take that the wrong way. Trading is fantastic and it's fascinating. I love it; I've been doing it for years. But good trading is actually boring. You see, you have to have patience, and patience means that you have to be disciplined and wait for the good trade setups.
Now, it's quite hard to do in real time and that's where a lot of people struggle.
Trading examples from this week
But I'll give you an example. In the last six days, I have taken no trades on the daily charts. There were two today, being Friday, but previously to that, for the last six days, I have posted and taken no trades at all on the daily charts.
And that is one of the timeframes that I love trading. And so going forward day after day after day is … you think, “Well, I should be taking something.” And as a trader, we kind of feel that we should be taking trades because that's what we feel we're good at; that's what we feel we should do. We feel that we have to force trade sometimes, and it's a very big danger.
The catch is that a lot of traders … Go back and have a look at the daily charts over the last six days, and you'll see that almost all trades have been either big, strong movements down, such as like the euro and the pound, and the kiwi and the Aussie against the US, all been indecision bars … have been very little to take as a new trade for either a continuation trade after a pullback or a reversal. Been a couple today that look okay, but previous to that, not a great deal has happened.
How do we trade these market conditions?
What do we do about that? Well, first of all, my real job as a Forex trader is to preserve my capital, and that's the important thing. There's no good just taking trades, just for the sake of taking some trades, because ultimately what you're going to do, is probably have more losing trades than winning trades that way. And guaranteed what you are going to do is please your broker because all you're going to be doing is feeding your broker's back pocket by taking the money out of your account unnecessarily, by taking trades that you shouldn't take.
Trading different time frame charts
When I was on my live webinar with my clients last night, we talked about this and thought, “Well, what else do we do? What else can we practically go and do out there?” Well, last week I suggested four trades to my clients based on the weekly charts. All four of them went and hit their profit target. This week, I've taken a buy trade on the US Canadian dollar based on the weekly charts, and again suggested to my clients on Monday. And that trade right now is up about 1.6 to one. So if you'd done nothing else than risked half of one percent on that one trade, and it re-traced beautifully, got in a buy trade, and now it's moved up very, very nicely, it would have made you, right now, as I'm recording this, over 0.8% account return just from that one trade. So there are always opportunities out there.
Live trading room webinar and examples shown to clients
Now on the webinar last night, I also shared with my clients a number of trades that I've taken and other clients have taken and posted on our forum site and emailed through to me, based on the eight- and 12-hour charts. Now I've created software that works on the MT4 platform. My clients have all the software. It allows us to trade the offline charts, the non-standard charts, such as six-hour charts, eight-hour charts, 12-hour chats on the MT4, MetaTrader 4 platform. Fantastic trade setups on those timeframes from time-to-time
This week, the eight-hour charts have been particularly good. A number of high probability, high reward-to-risk trades that we've taken, and we've made some great money from it. So think of it this way.
Don’t just look at one time frame chart
You know, don't just look at one timeframe chart. If all you want to do is say, look at the hour chart or four-hour chart, or only at the daily chart, and nothing happens, that's when the temptation or nothing shows. That's when the temptation is to start taking bad quality, low probability, trades. So my suggestion is that you have a look at a variety of different timeframes because, depending on the week and depending on the conditions, the quality of trades may or may not be there just on one timeframe. So as I've mentioned this week, nothing at all really until today on the daily chats, yet the 12-hour charts and to a bigger extent, the eight-hour charts, just a tremendous amount of really high quality trades.
So patience is the key; being disciplined is the key; preserving your capital is the key. Taking high quality, high reward-to-risk, high probability trades is the key. Don't just go out there forcing trades, feeling that, just because you're set at your charts, you have to take a trade. That is not the way that you're gonna become longterm profitable. So think about that, and remember, good trading is actually boring because you're doing the same thing methodically, looking for those high quality trade setups.
So once again, this is Andrew Mitchem, the Forex Trading Coach. Have a great weekend. I'll see you back here this time next week for more trading tips and information. Bye for now.