Some time ago I saw this post somewhere on the web-”What do traders need most”. My reply was “Patience and discipline”. I know, because I lack both of them. It is easy to equal trading success to performance of computer, or internet connection, or the broker and, my favorite, the “system”.  Everybody always chases newer and better trading strategy. We almost always forget about the intangible parts of this endeavour, but in the long run they are most important.

Even the best system will not do anybody much good, if one is not patient enough to wait for trades to come to us. It is almost universal fault of traders to force trades during times that given strategy produces no or little activity. This is equally true for longer an shorter term trading methods. For scalpers 3-4 trades a day might be very slow, while others would consider 2 trades a week to be busy. No matter how active one’s style is, periods between trades are always difficult, but we must learn to wait until proper set up, as defined by trading strategy, happens.

Once developed, or purchased, a system should be given long enough run to either prove or disprove itself. Very often people spend a lot time and/or money pursuing perfect strategy, only to discard them after few loosing trades, or sub par periods. While there is no universal length of time by which to judge given approach, past performance should provide some clues. We always should look at the length of loosing periods, depth of draw downs, number of consecutive loosing trades. If in real time use system performance starts to exceed historical extremes, perhaps is time to look for something else. At any rate, without patience ad discipline, trading career will be either short or fruitless.

I’m thinking about right now, because of relative inactivity I find myself in at the moment. With FED decision in a few hours, I don’t really want to get into new trades. At the same time, my books show many open trades, including the GBP-CAD from the Troubled Dollar post. Pound is showing signs of life, jumping few hours ago, after minutes of last BoE meeting were released. Apparently people who read between the lines liked what they saw. Another mover today has been Kiwi. This makes me readjust entry to the price action trade in EUR-NZD.

NZD made another very strong move on the news of growing economy. For the first time in 2 years New Zealand GDP increased by 0.1% . Country is officially out of recession. For now at least, nobody knows if this is going to last. NZD rallied once more, for about 550 against the Euro in just 2 days. Intermediate term chart, 4H, made new low and established another minor high, which becomes my by point. Order was moved to 2.0595. Set up in the beast remains unchanged.

No new trades at the moment, my plate is full. It is not only USD that can be jumpy after FOMC meeting. I’d like to remind everybody that Yen also has been responding very strongly to FED news recently. I’m going to sit on my hands and practice this patience and discipline thing. On the second thought, maybe I should practice it on the beach? After all, it is supposed to be 85 today, probably last such a warm day this year. Might as well enjoy it.

Mike K.