By Rob Colville on September 6, 2017 in
Over-thinking… it’s the trader’s worst enemy. Although many people won’t believe it – because how could it possibly be true? – most trading is about doing nothing. Unfortunately, for those who are just beginning (and even some who have been trading for years but not doing too well at it), the idea of just setting and forgetting just doesn’t seem possible. But the thing is… the thing that needs to be learned in order to be a successful trader, is that that is exactly what you need to do.
One percent. It doesn’t seem like much, does it? But that’s all the effort that really needs to be put into trading. Actual trading. The other 99 percent is where the waiting and the being patient comes in. That’s why it is said that most trading is about doing nothing. And that’s why so many get it wrong. They put 99 percent of their effort into checking their charts, checking their trades, moving money around, changing their minds, gazing at the screens… Doing that for 99 percent of the time means risking too much, and yet the majority of first time traders do exactly that. Because trading can’t be done in just a few minutes per day, can it? Only that’s exactly how it can be done!
Trading and hunting… what could they possibly have in common? Quite a lot as it happens. In both trading and hunting most of the time you’re doing nothing. You’re waiting. You’re being patient. You aren’t rushing anything. And, essentially, when you are trading you actually are hunting; you’re hunting out that perfect trade, the trade that will make you a profit. Now that is certainly worth being patient for. Trading is about doing nothing most of the time, and once you have realised that, you can relax. Literally. Set your trade and go away and do something much more enjoyable, much more fun. Leave it all alone to do its thing and you’ll end up with a much healthier bank account than if you insist on fiddling and changing and watching and worrying.
If you can get into the mindset of being excited about the waiting element of trading and not the trading itself, it will all become a lot more fun. Instant gratification might be the way of things these days, but anticipation is really much more thrilling. When you understand that most of trading is about doing nothing (even for weeks or months at a time), but that that ‘nothing’ can be the best part, you’ve cracked it – you have found the thing that gives you enjoyment, and makes you money. Not too many people can say they’ve discovered that particular holy grail.
Experienced traders will tell you that when it comes to trading, ‘little and not often’ is what wins out. Trading little and often (or largely and often!) is how money is lost, and it is low-frequency trading that gives you the profit that you are looking for. That’s how most trading is about doing nothing – it sounds counterintuitive, it sounds as though you should be doing more, but the truth is that the more you do the less you’ll make. Trading could well be the only career in which that is how it works, but work it most certainly does!
All our lives we’ve been told that we should be doing something, that we need to be constantly on the move or have something next on our ‘to do’ list. In trading, that’s not the case – most trading is about doing nothing, after all – so it’s no wonder that it can be difficult for people to just stop and wait. Most people will feel as though they are doing something wrong, that they are missing out on something. And that’s when the trouble starts because they will begin to check their trades. Just a little at first to see what’s happening. And then more and more.
But if you can do nothing – no matter how uncomfortable that feels – for a few trades, you’ll start to make money. Making money will make you feel good, and when you understand that it’s the doing nothing that is helping you achieve that goal, doing nothing will become much easier to handle!