Thursday Trader's Tip: Silence Your Urge for Action
Thursday Trader's Tip editions offer quick trading psychology advice that can be digested in 5 minutes.
This week, we’ll talk about the power of silencing your mind at key times to improve decision-making.
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Written Version:
The impulsive trader often has an opinion about everything that happens in the market or at least feels they should do.
Working with impulsive traders for this long shows me a pattern—the urge to act makes them form an opinion about the market right at its open, and these traders often take impulsive trades early in the session just to see their beautiful setup pan out later on. “If I only had had the patience to wait for my setup, I’d have caught the move of the day.”
They recognize the mistake and spot the symptom—a lack of patience—but keep repeating the same pre-empted trades over and over.
How can you escape this ‘urge to act default mode’?
One of the crucial mindset shifts that needs to happen along with fixing this mistake is: You don’t need to have an opinion about everything that happens in the market to succeed. This is a symptom of trying to overcontrol the uncontrollable, which shows the trader’s insecurities.
Some moves are not for you, just like some topics are outside your expertise. You don’t need to hold opinions about everything.
Your strength is your strategy, and you’re sitting at the charts to have opinions about it. If the market information isn’t conducive, sit on the sidelines until the market tells you enough to have one.
Taking a trade in the first 15 minutes of the market opening is most of the time reacting emotionally to sustain your need to act; it’s not market-motivated.
Patience gives you an advantage—you’ll have more information to formulate a well-informed decision.
So, practice your power to remain quiet and observant. Again, just like any skill you want for your trading, you can practice it outside of the charts: when you’re engaging in a conversation with someone, practice listening. Drop your beliefs and let the other person's words reach you without judgment. Don't try to fit the information in your mind; listen from a place of deep understanding.
By becoming a great listener, you’ll also improve your observant skills, which greatly impacts your way of dealing with the market.
While you used to make decisions based on 70% of the outside information, now you can absorb 100% and make better decisions. Nothing passes through you because you can let the market talk, assimilate, and only then do you respond.
Peaceful trading,
Sara
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