Sometimes the hardest things to do for a trader is to sit on his hands and do nothing.
Somewhere I read Jim Rogers saying that he would do nothing until he would find “money lying in the corner, and all [he had] to do is go over there and pick it up.” (I googled what I remembered from that quote… and found this picture).
The rest of time he just reads and travels, I guess. The takeaways are two:
1 – You have to be prepared,
2 – You have to know what “money” looks like. Meaning, you need to know when there is an opportunity.
In trading, this means that you need to figure out when the probabilities start to tilt, even barely, in favor of one direction instead of another. Those changes don’t happen often, therefore you have to patient.
The reason it’s so hard to wait it’s because one of the exciting aspects of trading is the action. Reading and researching don’t look like action.
The other reason is that it’s hard to make money just reading. We are greedy and want to make money now. Hence, we have the urgency to get out and pursue the trade, instead of letting the trade opportunity come to the surface. Yet, it’s the execution of a process that delivers profits, not our clever signal-finding. The signal should be part of your plan already. There shouldn’t be anything fancy about them. Those are either breakouts, reversals or some type of indicator crossover. It ain’t rocket science. Controlling your impulse, now, that’s the hard part.