By Rob Colville on May 18, 2017 in
These days, when we want something, we get it. Life is basically one big ball of instant gratification, and waiting for something has become a thing of the past. Almost. We still have to do it sometimes, but it’s an art that is fast becoming obsolete. So, when we do have to wait for something it can feel pretty terrible.
The problem is, instant gratification is bad for trading. In trading, it’s more likely that we’ll need to be patient – instant gratification can actually be something that destroys a trader’s account.
Think of all the good trades you’ve experienced. It’s likely that you had to wait. You had to wait to find the right trade to begin with. You had to wait to see any results. Maybe you even had to wait for something exciting to happen (and maybe it never really did). The point is, for a good trade with a good result you had to wait. Instant gratification – or the expectation of it – would have been bad for trading. If you hadn’t been patient you would have rushed things in the hopes of getting a quicker result.
Where would that have put you? In a dangerous position, that’s for sure. You could very easily have lost the lot.
Good for you! That’s how to go into trading – have realistic expectations because anything else is bad for trading. It’s bad for you too. Don’t expect, for example, that you’re going to make a hefty profit on every trade. Understand that you will lose some, because that’s how this thing works. Or you might come away with less than you wanted. Whatever it is, having high hopes that are dashed is a sure fire way to stop trading altogether. Having realistic hopes that are met, well, that’s much more comforting. And, even if these realistic hopes turn on their heads, you won’t be too surprised because you understood that it could happen from the beginning.
If you want to do something that is incredibly bad for trading then jump in feet first and don’t want for the right result. That’s how losing happens. If you want to do it the right way, you must be patient. And realistic. We know that can be hard, especially when you’re excited and keen to see a return. But remember this: a trade can sometimes take weeks to complete, and that’s absolutely okay. That’s how millions are made. Now do you think you can be patient? Thought so!
The Average True Range (or ATR) is an indication of where your trades may move to in the next few days. It’s not psychic – it’s just an way of getting an idea of where things might go. So for those who aren’t that great at waiting, the ATR can save you from doing something bad for trading.