When it comes to trading, that’s my motto.
I’ve now coached a statistically significant sample size of over 3,000 traders. And I’ve worked with enough traders to find reliable patterns based on what gets results and what doesn’t.
One of the most common reasons that traders fail has nothing to do with their ability to read the market or manage a position.
Instead, the biggest downfall for many traders is their impatience. A good trader isn’t defined by their ability to spot great trades.
Instead, it’s by their ability to avoid bad trades. This is where trading and playing Texas hold ‘em poker are very similar to one another…
Keeping Your Head in the Game
You see, a game of Texas hold ‘em will see a total of seven cards dealt in three stages…
First, each player will get two cards, and won’t reveal them to their opponents. Next, the dealer will lay three more cards facing up. This sequence is known as the flop, and are communal cards.
After the flop comes a fourth communal card, the turn. Finally, there’s the fifth and final communal card, the river.
Between each stage that the cards are handed out, a round of betting takes place. This is where players will jockey for position and try to force their opponents to fold their hand by raising the stakes.
If a player bets the required amount to stay in the game, then they get to see the next community cards that the dealer will pull from the deck.
But here’s where trading and poker are very similar…
Free Trading Resources
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An elite poker player will only see roughly 15-20% of total flops. That means the best poker players (even the most aggressive ones) will fold roughly 70% of their hands before they even see any of the community cards.
In other words, a good poker player sits on the sidelines more than they see any action. It’s the same for elite traders…
Wait for the Right Moment to Strike
The best traders I know are sitting on the sidelines, patiently waiting for their moment to strike. They know exactly what they’re looking for… and when they see it, they pounce.
They don’t trade out of boredom, or on a hunch. Instead, they’re completely dialed in and disciplined. That’s why you’ll often hear that good trading is boring trading.
If you’re looking for thrills, go to the casino. It’ll be a lot more fun than sitting in front of your trading screen and likely just as fruitful, too.
The next time you find yourself itching to get into a trade, take a step back and ask yourself if this is a trade you’ve spent time planning and waiting for.
If it’s a trade you want to take because you feel like you need some action… or because the market suddenly started to move and you don’t want to miss out…
Then you should probably fold your hand and wait for the next set of cards.
Analyst, Market Minute
In today’s mailbag, a Currency Trader member comments on Imre’s forex service…
Hi Imre, I’m entirely new to trading. After reading many of your publications, and Q&As, I’m convinced that your ways of forex trading are the most reasonable, and with considerably less risk.
Keep it up. Don’t take drastic changes or yield to the pressure from your subscribers! Have a good day.
– Ken L.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].