Impatience holds every investor, whether a beginner or an experienced, with its sharp claws in many major and minor ways. The expectation of higher returns makes them fall into the claws of this devil. The newcomers in the field of forex market think that they know everything and success in this world is a luck game which could be played without any effort. But the truth is the exact opposite. Success in the field of forex can only be achieved with a thorough study, analysis, and practice. It is not a matter of weeks or months, years.
Many beginners jump into the world of forex without any knowledge as brokers offer to start the account with a little investment. And that so without any market knowledge as they think that everybody makes money in this world then why can’t they. They start expecting the unrealistic things which ultimately leads them to meet the Devil #2 i.e. Lack of Clear Vision.
The devil of impatience hits both a beginner as well as an experienced investor, but its primary target is always a beginner or an intermediate. Keep in mind – Impatience and greed go hand in hand. If you are greedy, you are impatient. Think that you are not greedy at all? Just try putting some bucks into the market and see. Everything would be self-explanatory. Nobody is satisfied with what they have. Everybody wants more and more.
Ok…if you have ever traded in the forex market, you must have experienced the following scenario:
You have well studied and analyzed a currency pair to trade in. You have examined the previous charts as well as established the entry point. After finalizing everything, you open a position at a particular point, setting the stop loss keeping a profit target in mind.
Now as you are in a trade, you start analyzing the trend, price, etc., but suddenly you realize that there is no resistance where it should be. You become confused and start thinking where to exit the market. Everything looks like a trap; the chart starts looking like a spider web rather than a chart. You get so confused that now you cannot even read it correctly. Sweat beads start flowing on your head, but suddenly the markets start moving in the positive direction, and you take a sigh of relief seeing some pips of profit.
And then suddenly again the market starts moving in the opposite direction against your wishes, and you stare at the screen with anxiety which could be there for hours or days. Finally, you get so pissed off that you just look for an opportunity where you can make a little profit and just exit the market.
But this is not the end friends….
Now when you exit the market, you see that the price is further shooting up in your favor crossing the profit target and going beyond it!
Then what? You just sit and regret your decision. That is all, and that is the result of the first devil IMPATIENCE.
Accept it or not, you have become the victim of this demon. Mostly those traders become the victim of impatience who does not have confidence in their study and analysis. They have a wrong notion that there is some fault in their fundamental or technical analysis and that is why there are always anxious to exit the market.
Solution to Kill the Devil of Impatience
Let us talk about the long term investment first. If you are an impatient long-term investor, the best thing that you should do is to re-evaluate everything. Ask yourself, “Is your return on investment a reality or an impossible dream?” or “What is your long term financial goal?”
Apply the rule 72 to check the number of years in which your money can be doubled provided you have invested after a through study and analysis.
Suppose your annual return from the investment is 20% and you want to check the number of years in which the investment will get doubled. Here is the calculation to check it:
72/20 = 3.6 years
This means if you are getting an annual return of 20%, your invested money will get doubled in 3.6 years!
Many people just get an annual return of 10% thinking that it will take forever to double the money. But if you apply the rule 72, you will get to know that it takes just 7.2 years to double the invested money.
Now, if we take day trading or short term trading, confidence is the key. And the only way to become confident is study hard and practice a lot. The more you practice, more experience you will gain. However, you can opt to practice on a demo account which is a simulator of the real world trading.
But the truth is, it is very easy to trade on a demo account as there is nothing to lose, but an experience to gain. The real test is when a trader goes on the floor and plays with real dollars. This is the time when you have to be confident about the strategies and rules that you put on a demo account to gain profit. Don’t get nervous as this is the thing that makes one exit the market without making the real profit. Kill the devil of impatience and play as you played on the demo account.