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How do profitable traders make money? They do nothing 99% of the time.
“The key moment of our investment style remains a certain inhibition, bordering with laziness”, Warren Buffet.
What is the main reason why most traders lose in the financial markets at the end of the day? The answer is simple: they do too much, they think too much, spend too much time watching charts, trade too much and risk too much in deals and so on. Most successful traders in investors spend 99% of their time for waiting for an opportunity to enter the market but not opening deals. If you have just started your tough path of searching for information about how to trade and invest in the financial markets, then you should browse our website in a more detailed way, as you could find here lots of useful articles and outlooks.
Only 1% of traders’ efforts have to be spent on opening deals and controlling positions. In other words, they do nothing most of the time. Or do you trade 99% of your time and wait patiently for only 1% of your time?
Hunting means patiently waiting for a long while.
A profitable trader spends the most part of his time pursuing good deals as a crocodile spend the most part of his time chasing its victim. Trade like a shark but not a fish. Wait patiently for a trading opportunity to avoid being a part of the crowd which behaves like prey to be eaten by professionals. How could you become a predator but prey? The answer is simple: wait, wait and wait for more. It’s a well-known fact that traders, who open deals too often, lose money in the financial markets while those, who trader rarely, become profitable. Every trader will get to that one day after gaining a certain experience in trading and spending enough time to understand that.
Warren Buffet is a master of doing nothing.
Successful trader deals like a sniper. He patiently waits for necessary criteria will appear to open a new deal and makes one single shot (opens one position) but not shoots like a machine gun, opening too many deals. It’s probably not surprising that one of the greatest investors of all times, Warren Buffet works like a sniper as well. Just think how does he manage billions of dollars? He’s not trading every day, that’s for sure. All you need to do is just watch a video or read a book about him, and you will discover that he’s a very patient and precise investor. Buffet thoroughly treats his deals which he executes in the financial markets. Once he’s ready, he pulls the trigger without any doubts. Buffet’s deals can be described as high-precision and low-frequency. Any trader can learn a lot from Mr Buffet. However, not every trader uses the rule of buy-and-hold, investing in some assets. But the trading approach could be modelled to the same system as Buffet has. The thing is that professional traders and investors do nothing for the most part of the time - they do not start trading or managing deals. They can spend time on analysing and researching markets, they are pursuing the prey.
How to change your attitude to doing nothing?
Every human likes getting a quick pleasure from whatever he/she does. People always hang out in social networks to increase the dopamine level in their brains, which lifts the level of satisfaction and influences the process of motivation and learning. Most of the beginners in the financial markets want to get fast profits and immediate reward, as well as thrill from the trading process. And of course, many beginners become dependant on those emotions and feelings, putting their trading decisions at to risk. But when it comes to trading, the consequence of such behaviour could be serious. That might lead to a feeling that the trading is just like gambling, playing on a slot machine and so on. Many traders open one deal after another, acting as they play in a casino. The difference is that people usually lose in a casino and most people would not risk with the money needed for life. Many think that they will win because of natural ability to trade and that’s why they risk for more money they can allow. After that, the trading becomes an addiction and lots of accounts are getting wasted.
How to change that harmful mentality?
One of the best rules in the financial markets is doing nothing - absolutely nothing - until an opportunity comes. Jim Rogers said: “Most people always have to play, they always must act. I’m not saying I'm better than the majority of people. They play a big game and say ‘Oh my God, I’m so smart. I have just made a profitable investment’. After that, they rush to do something with that money again. They cannot just sit and wait for new development”.
The way how we are hovering around our wrong convictions in trading gives us a simple understanding and accepting an idea of doing nothing. Try to get used to a thought that trading is extremely boring. At the end of the day, after several large victories, which have been a result of patient waiting, you’ll start directing your thoughts and ideas out of the pleasure that you would get from continuous standing in the market. You will free a lot of time for analysis and research of new trading opportunities. As soon as you will understand that you need to patient, simply learn the market or even don’t look at charts completely, you will make much more money in the long run, and you will be excited about the next round of the hunting, even if that would be just one single deal in two weeks.