How to Wait for a Good Trade Each Day
How to Wait for a Good Trade
Why is it so hard to wait for a good trade each day?
In tonight’s video, I’ll show you how to trade like a sniper.
How to do the right preparation, with proper self-control, so you’re confident to pull the trigger when the timing is right.
So why do we force trades?
Why is it so hard to maintain self-control during the trading day?
There are many reasons why it happens…
First of all – if you’re a trader, you’re probably a pretty driven person.
You’ve likely succeeded in other aspects of your life, and you assume you’ll succeed in trading as well.
You have goals you want to achieve, and you’re not afraid of hard work to achieve them. This means going out every day and making it happen. Doing the work.
This desire to achieve is awesome, and the effort to make something happen works for most things in life – but it doesn’t work very well in trading.
In trading, the act of “doing nothing” is just as important as doing “something”, and we need to understand that “waiting for a trade” is part of taking action.
So start by separating this idea that you have to be “doing something” to make money in the markets. Because “doing nothing” is often MORE important. (especially when you’re new)
I also think the lack of experience is a big reason people force trades and struggle with waiting for a good trade.
Simply put – you have to know what a good trade looks like if you want a successful trading career, and you’re going to struggle with patience if you don’t.
I’ll talk more about my definition of a “good trade” later in this video, so make sure you keep watching…
I also meet a lot of traders who place unrealistic expectations on their trading.
This might be lack of experience, or trying to qualify for one of those “funded trader programs” you see being pushed online these days (which are almost always a trap!)
You need to understand – we can only take what the market gives us each day.
Sometimes it’s a lot, but sometimes it’s nothing, and we need to be OK with that.
The moment you say, “I’m gonna make $10,000 this month” or you create a “$100,000 challenge” you put yourself in a situation where the pressure to find winning trades will often push you into forcing trades and taking losses.
Some of the best trading advice I can give you is… “come in every morning and take whatever the market gives you.” Because that’s the only thing you control.
The markets are different each day – maybe they’re slow that day, or you didn’t sleep well the night before. It doesn’t matter if your rent is due next week, or your buddy is ahead of you in your bet to be the first to $50k… you can only take what you get each day.
And lastly, I think another big reason we struggle with waiting for a good trade is because we don’t have a plan for how to wait — and we don’t have the self-control to keep ourselves from forcing bad trades in the meantime…
But not to worry, because by the end of this video, you’ll have a game plan to follow, so let’s keep going…
How do we wait for a good trade?
Well – you gotta start thinking like a sniper. What’s a sniper?
A sniper is a highly trained soldier, who specializes in shooting targets with modified rifles from incredibly long distances.
More importantly, the best snipers know how to act without detection, only when the reward is worth the risk.
Because the wrong shot could lead to their own death, or the deaths of people around them.
The sniper waits patiently, controls his/her body & breathing, and looks for the ideal opportunity for the perfect shot.
They don’t spray bullets everywhere trying to hit something in the process. No. They wait those few extra moments, when timing is right to take the perfect shot.
A good sniper doesn’t feel anxious or scared, all they feel is their finger on the trigger, and the target in their crosshairs.
Then what do they do? Once they complete their shot? They move quickly to finding the next target.
No celebration, no bragging on social – they keep moving – because all they know is execution.
Does that sound familiar? It should, because that’s exactly how we should be trading these markets. We should be trading like a sniper…
Trade Like a Sniper
It all starts with extensive preparation. A good sniper spends more time preparing than shooting.
They practice in different conditions. How to hide in forest, desert, snow, etc. How to shoot in rain, snow, and windy conditions…
And they always follow a system. They prepare ahead of the shot, control their emotions leading up to it, execute the shot properly, and review their actions so they’re always improving.
This system ensures they stay alive, and they’re target gets hit. Every single time.
And they never force the shot, because that would put themselves (and others) at risk.
They wait patiently, for just the right moment — when they have an unobstructed view of their target where the reward outweighs the risk.
They are the definition of self-control. They sit motionless for hours on end, controlling their breathing, their muscles, and their mindset the entire time – because their opportunity could come at any moment!
And once the job is done, what do they do? They keep moving!
No celebration if they hit the target, and no second chances if they miss.
They gotta get up, get out, and go find the next target. Because if they don’t, they might not make it out alive.
And when the dust settles, they take inventory of what happened.
It’s not just “hit or miss” – it’s a forensic review of the conditions leading up to the shot, the technique that was used, and the results that came from it.
Because they know the review is just as important as the shot itself – it’s that review that makes the next shot even more effective. And the process continues…
I gotta say – it kinda gives you chills just thinking about it, doesn’t it?
Pardon the language, but these snipers are BADASS! Aren’t they?
And that’s exactly what I want you to become. A BAD ASS, trade plan executing machine.
So let’s break these down and apply these principles to your trading…
(1) It starts with the right preparation
Just like being a sniper, trading is a performance skill, which means we should be spending more time preparing for a trade, than actually trading.
For me, being prepared each day means knowing what a good trade looks like.
And you have to remember that market conditions are always changing.
Just like a sniper has to deal with rain, wind, snow, etc… so do we as traders…
Sometimes the markets moving with strong trends…
Other times the trends are weak and almost flat…
And sometimes the markets ARE flat, trading sideways inside of ranges…
We need to invest the time OUTSIDE market hours to learn how to best trade each of these conditions…
I’ve mentioned this in previous psychology videos – but the key to trading different market conditions is to understand “rotation” in the markets.
Trending markets love to rotate back and forth inside channels – the slope and width of those channels determine the strength of the trend, and tell us almost everything we need to know about how to trade them…
But range markets are different…
Ranges love to rotate too, but they rotate from top to bottom of a range.
And again, the size of that range is an important clue, telling us the right entry patterns and trade management to maximize our trading in those conditions…
(insert range image here)
And not to worry – I’m going to give you a system to follow for this at the end of this video, so make sure you keep watching…
That’s the type of preparation we need.
When you’re new to trading, you should be spending more time preparing for each trade than actually trading – with the goal of learning how to trade each of these different market conditions.
(2) Follow a System
How do we wait for a good trade without forcing trades?
We follow a system – a set of rules to define exactly when the time is right to pull the trigger, or wrong to sit on hands and wait.
I’ve been using rules in my trading for nearly 15 years and I’ve learned a lot of right and wrong ways to use them. For example…
They need to be short, potent and very specific.
We can’t use 20 rules because it takes too long to use them, so make them potent.
And they need to be specific – leaving no question about what defines a good trade.
But most importantly, they need to be prioritized by when you’re going to use them.
For example – the rule for “avoid falling resistance” should come way before the rule for “signal candle closing above the moving-average”…
That makes sense, right?
I want my list of rules to help me “work my way” into the trade, so I can qualify each trade as the situation develops, not just all at once in the blink of an eye.
I would assume a sniper works the same way – they don’t just sit down, run thru the system and start firing-off shots.
They’re sitting there for hours on end, working their way up that perfect shot.
(3) Stay Patient & Selective
Good trading also requires us to be selective with our trades. Staying patient along the way.
That sounds easy at first, but it’s hard to wait for a couple hours without doing anything. You really need to have a plan for how to wait.
What’s your excuse gonna be for why you’re not forcing that next trade?
By the way – In this case, an excuse is good!
I know – we live in a world where excuses are worthless. The job gets done, or it doesn’t. I’ve been a big believer in “skip the excuses” for my entire life, but like a lot of things in trading – what works out there, doesn’t work very well in here!
You’re gonna need an excuse the next time that little voice says “come on Joe, take the trade! You don’t wanna miss this move again, do you?”
You’re gonna be tempted to break your rules, so you better think of something ahead of time!
Keep telling yourself… “I’m waiting for my trade today. This is what it looks like, the rules are right here, I just need to wait for it because I know it’s out there.
As I’ve mentioned in previous trading psychology videos, we get plenty of good setups each week, so there’s no need to force them.
But there is a need to have some excuse, some story you can tell yourself for why you’re waiting on the perfect shot.
For me, I’m constantly doing an assessment of the market conditions. Where we are, strength of momentum and what my indicators are telling me.
That keeps me alert and ready to react when I need to.
And just like a sniper – I need the situation to be right.
I need an unobstructed view of my “target”…
where the reward far outweighs the risk…
And while I’m waiting for those conditions to be met, my default mode becomes self-control.
You know… they say “trading is waiting”, which is why self-control is one of the most important skills you can develop…
(4) Self-Control
That leads us into step four of trading like a sniper –
How do we wait for a good trade? We must develop and maintain self-control.
I mentioned in a previous trading psychology video, that we need to develop our focus muscles so we can wait for the best trades each day.
This starts with living a balanced lifestyle. Get enough sleep, eat real food a few times each day, and do your best to avoid chemicals that get you high or bring you down.
You need your body to self-regulate – not dependent on caffeine to wake you up, or sleeping pills to put you to sleep.
For me, it all begins with my evenings. I skip that last glass of wine, turn off the TV a little earlier, and do some light meditation before a good night’s sleep.
The following day – eat healthy, get some exercise, work hard, spend some time with your kids, your friends, your spouse, whoever you love.
That BALANCE is what we need here. It’ll make EVERYTHING easier, especially your trading.
Then get to work on removing distractions during the day – not just from our time trading, but the entire day!
If you’re living every day in a distracted environment, you’re not going to be able to sit quietly and wait for a good trade for a few hours. Your mind and body will still crave that stimulation…
So get your cell phone off your desk while your trading – get off social media, ditch the chat rooms, and stop checking email or news every 5mins.
It’s not easy at first, but training your mind to be content with sitting quietly in a room without outside stimulation is essential for your trading.
IN fact – one of my favorite authors, Ryan Holiday, wrote a book titled “Stillness is the Key” and he talks about why this is important and provides strategies for making it work in a busy world. (I’ll drop a link for that book in the description, it would be a great book to read this weekend).
And possibly the most effective tool in developing self-control is through mindfulness work, such as Meditation or Yoga.
I can’t think of anything more effective at developing those “focus muscles” than using something like the “Take 10 Series” from Headspace.com
And again – I’ll drop all these links in the description of this video, or check the blog post on our trading blog.
And last, but certainly not least – find a hobby outside of trading.
Why? because it’s impossible to be perfect as a trader.
Losses are part of the game – and a hobby, something that makes you feel good about yourself and gives you self-confidence, will ease your mind and make it easier to wait for a good trade.
I know this may not seem important – but when you spend your free time with the people you love, doing things you enjoy – you’re just going to FEEL better when you get to your desk the following day.
And when you feel good, you’re gonna be more effective in your trading. Simple as that.
For me personally – I took up gardening a few years ago as a hobby, and I love it.
You may have noticed that big garden I have planted in my backyard (in the background of my videos).
That simple hobby, takes me away from my desk, slows me down, makes me feel good about what I’ve accomplished, and makes me appreciate the patience required in doing ANYTHING worth doing in this life.
So find a hobby, and bring a friend – it’ll help far more than your trading, trust me.
(5) Keep Moving!
The next step in trading like a sniper is to keep moving!
What does a sniper do after they hit their target? They get up and move!
There’s no celebration after the hit…
They don’t leave the scene beating their chest, acting like they’ve never hit a target before, do they?
And no – they’re not depressed if they miss their shot…
And they certainly don’t let the last miss cause them to miss the next shot!
What do that do?
They get up, they get moving, and they go hunting for the next target.
This is what we need to do as traders.
Winning trades don’t cause celebration and over-confidence, and losing trades don’t cause panic and desperation.
After we take each trade, we take inventory in our trading journal, and we move on to finding the next good trade.
And that brings me to the final step of trading like a sniper…
(6) Detailed Review
After every trade we take, we take inventory with a detailed review of the trade.
This begins with keeping a trading journal.
As I’ve mentioned in previous videos – this should be a forensic review of each trade. The market conditions, support/resistance you used, what the indicators were saying, the setup, the signal, trade management, everything.
You should also document your emotional state leading up to (and after) each trade…
Because the ultimate goal is to use this information to identify patterns – not only in your trading, but your emotional state leading up to each trade.
For example – a lot of people might notice that they force trades on Mondays when they’re eager to make some money to get in the green for the week.
For me, I was always guilty of forcing trades at the end of the week (or end of the day) when I’m tired, less disciplined, and sitting in the green for the week…
We all have SOMETHING — and keeping a journal will help you pick up on those bad habits (those patterns) that are usually causing most of your mental mistakes.
We also have GOOD patterns too! Like I mentioned earlier – when I get to sleep on time, get a good night’s sleep, I usually see better results the following day.
How was your sleep quality? How was your mood when you got to your desk? Those are important details. Are some patterns helping you? Are other patterns hurting you?
Keep a journal and you’ll find them!
And speaking of finding them – you need to invest some time to read it and make changes.
Writing isn’t enough, we have to commit an hour on Saturday (or) Sunday morning to read that journal.
Review the screenshots from each trade, update your rules, and make small adjustments with the goal of getting 1% better each day.
I’ve lived my entire adult life trying to get better “week by week”.
I can’t guarantee I’m going to win every day, but I can guarantee that with the right attitude, the right plan, and a balanced lifestyle, I can win every week.
That’s my focus when I’m reading my journal. How do I win next week?
(RECAP) How to Wait for a Good Trade
Alright, we’ve covered a lot in this trading psychology video – let’s do a recap…
Here are the six steps to trading like a sniper…(waiting for a good trade each day)…
- You gotta know what a good trade looks like…
- Work the system of using rules to qualify each trade…
- Have a plan (and an excuse!) for the time spent waiting…
- Build those “Focus Muscles”…
- Keep moving! Go find the next trade!
- Keep a journal so you can identify your best and worst patterns…
Now THAT is a powerful strategy for trading success…
But what does this entire process start with? What’s the first step?
You gotta know what a good trade looks like, and have a system to follow…
Learn my 3-Step Trading Strategy
This is exactly why I use (and teach) my 3-Step Strategy with my students here at SchoolOfTrade.com
If you’re having trouble waiting for the best trades each day, or you don’t KNOW what a good trade looks like, this system will make it a whole lot easier!
Step 1 – What’s the Day Type?
For example – in Step one we have to identify what I call the day type.
Yes, the markets are different each day, but they can always be classified into either a trending Market or a range-bound market. it’s as simple as that.
When you know the day type, you know what type of strategy works best that day, which (for me) makes it a lot easier to stay patient and wait for the best trades…
Step 2 – Find Support/Resistance Levels
Then, in Step 2. Once we know our day type, we then apply support and resistance levels that work best in those specific market conditions.
Just like a sniper would use different tools and tactics in windy or raining conditions, we do the same thing with this strategy…
For example, trending markets will use different support and resistance levels than range-bound markets.
One of the most common reasons new traders lose money is because they’re trying to use the same levels of Support/resistance every single day, even as market conditions change!
Not to mention, you’ll find it SO much easier to wait for the best trades when you know which support/resistance levels are more likely to make you money that day…
Step 3 – Trigger the Entry!
And finally, in step three – once we know our day type, and we find the right levels of support and resistance – then we look for entries off those price levels.
There are four basic entry categories you’ll learn in step 3 – Failures, Breakouts, Pullbacks, and reversals.
Most importantly, I teach my students all the specific RULES we use to qualify each of these entry setups – so we have the confidence to pull the trigger when the timing is right.
This is the type of system you’ll want to follow each day – because it helps you adjust to changing conditions, find the best support/resistance levels, and time the entries properly no matter what the situation is…
If you’re having trouble waiting for a good trade, or maybe you don’t know what a good trade looks like, or maybe you just want better results in your trading – this 3-Step Strategy will definitely help you…
It’s really easy to learn too – so I’ll put a link in the upper right corner of this video and you can learn the whole thing as part of my Free Quick Start Course…
You know – the markets are complicated, with a lot of moving pieces to learn at first, but this 3-Step Strategy will give you a simple roadmap to follow to get your trading on the right track…
Not to mention – I provide HUNDREDS of examples of what my definition of a good trade looks like, so make sure you grab that link in the upper right-hand corner – you’ll really benefit from that Free Trading Course…
