What is the main reason why most traders ends up losing money in the market? It’s simple: They do too much – they think too much, they are looking at the charts too much, shopping too much, they risk too much and over and over again.
The most successful traders and investors of our time spend 99% of their time waiting for opportunities and studying the markets, rather than to act on them. Approximately 1% of their handelsansträngning to be spent to carry out trading and senior management positions. In other words, they do mostly nothing. Can you say the same? Or do you spend 99% of your time on business and only 1% of your time waiting patiently?
The profitable trader spends mostly of their time to wait for good trades. Do you want to trade like a predator, be a trader waiting patiently in ‘the bushes’? You want to be part of the amatörhandeln as ”eaten-up” by professional traders every week.
How accomplish you to become a predator? It is simple – wait, wait, wait and wait.
I like to say, ”hurry up and wait” mode to the right market conditions to be presented. What this means is the fact that I am happy to wait because I know I am practicing self-control and patience, and discipline, and I know that this is how to earn money on the market. I have no problem with waiting for the right setting to form the perfect flows, sometimes in weeks or t.o.m. months.
The reason is simple because I know that trading with high frequency make you lose money in the market and trade with the low frequency makes you a profitable trader. Each trader eventually learns enough, with time and experience on the market.
Warren Buffet is a master at doing ”nothing”
My favoritkoncept and metaphor in order to learn how I trade is a ”sniper”. ”Snipers” approach as defined in my previous articles on this topic is, in principle, I wait patiently as a sniper for my predefined handelskriterier.
Perhaps surprisingly, it is also how the ”greatest investor ever,” manage themselves and their activities in the market. I am talking about none other than the great Warren buffét, of course. Keep in mind how he handles the billions of dollars – it is not by coming into the market every day, it is safe! All you need is to read a book or watch the recent documentary about him, ”Becoming Warren Buffet” and you will see that he is an extremely patient and successful investors.
Buffet is not only tålamodig and precisely about the transactions he makes on the market but when he is ready, he shows up. Sometimes, he buys the whole company! You can call honon for a low-frequency and high convinced the investors. As traders, we can learn a lot from Mr. Buffet. While we are doing something a little different than long term investing or ”buy and hold”, we should really model the our swing trading according to Buffet.
Here is a great quote by Mr. Jim Rogers from Market Wizards
I’m just waiting until there is money that is in the corner and all I need to do is to pick them up. I do nothing in the meantime. Some people who lose money in the market sometimes say, ”I’ve just temporarily lost my money, now I have to retake them.”
No, you will not. You should sit there until you find any opportunity.
Do you see? The point here is that the most profitable investors and traders are doing nothing. They may have studied or analysed the market during the time, but it count as ”stalking”.
What does it mean to do ”nothing”?
It is innate for us that people want a ”quick thrill” in everything they do. By continually checking social media on our phones increases the amount of dopamine in our brain, for example. We are in a society that is dependent on doing what feels good, more often than to do what is good. We are born gamblers or speculators, looking for immediate rewards and tensions in life, with the help of money.
When it comes to trade, the consequences for such behavior to be serious.
It can lead to to you treat your trading account as if it is a slot machine. Many traders ends up in the shops, one after another, as if they pull the arm on a slot machine over and over again in a casino. Of course, the difference is large, we tend to expect to lose at a casino, so we do not take money which we really need. In the trade, many believe that they will be profitable because of some ”innate ability” so to risk more than what you should do, or trade with money that you really cannot afford to lose. Of course, when you start to shop and get dopaminfixen it becomes an addiction that leads to their trading accounts will be länsade.
How does this toxic handelsmentalitet?
One of the best rules anybody can learn about investing is ”to do nothing, absolutely nothing”. Most of the people must always play, they always have to make something. They make a big play and say, ”God, I’m so smart, I just tripled my money.” Then they rush out and do something completely different with their money. They can’t just sit there and wait for something new to be developed. – Jim Rogers
The way in which we bypass our own flawed handelshypoteser is simply to understand, accept and then embrace the idea of not doing anything. Be comfortable with what you consider to be ”boring” and communicate with it. After a few big wins that resulted of you waited patiently at the strong confluence, you will begin to omjustera your thought processes. When you feel that you are not doing enough, you are in the right zone, you need to master it to do nothing and you will have to find something else to replace the ”void”.
When you understand that you are patient and study the market or simply not even look at the market, you will get more money in the long run, your hjärnkemi will start to turn and soon you will look forward to the ”hunt”, even if it means you have to wait two weeks.
The market is slower than we imagine and the trade can take a long time to play out. The market is showing that patience is necessary in order to catch the big draws and we need to ignore the short-term ”shake outs” that make most traders can think of, and exit too early …