Updated: Jun 23
Today I'm discussing a topic that's been crucial to my success as a trader – patience. But let's add a little twist to this virtue and call it 'paytience' (this is totally not my idea, I wish I was that clever!) Why is patience called 'pay'tience? Because in trading, patience really does pay!
We've all heard the saying "patience is a virtue." When it comes to options trading, paytience is more than just a virtue, it's a strategy we promote at Good Kids Trading (GKT). It might sound like the opposite of what you want but we want to turn the exciting world of options into a boring income stream! Excitement and emotions sometimes pushes traders towards making hasty decisions fueled by emotions, most notably fear and greed. That's where the art of paytience comes into your trading plan.
GTK believes in trading small, trading often, and trading mechanically (I know this is in every article I write, but it really is the best way to be a successful trader). This means letting go of that itch to react impulsively to every market move. Instead, allow our math-based strategies to do their work over time. Remember we’re playing the game of statistics here. Like a well-aged wine, many options strategies need time to mature to offer the most satisfying return, don't be tempted to exit at the worst possible time. Don't let emotions take over!
We deal with high probabilities. My strategies are structured in such a way that the statistics are on my side. This is comforting! I keep my plan so simple that I know exactly what will happen no matter which way the underlying moves. Knowing that I have a high probability of profit allows me to be 'paytient' and keeping it simple allows me to stay committed to my strategy, even when the market feels like a wild roller coaster.
With paytience we set our Good-Till-Cancelled (GTC) orders and then let them do their job. We don't need to glue our eyes to the screen, biting our nails with every price movement. Instead, we can trust in our plan, knowing that our GTC orders are lying in wait, ready to pounce when our profit targets are hit.
Paytience also frees me up to focus on other important aspects of my life. I spend time with friends and family. Using my time in a more meaningful way without the stress of watching every single tick of a stock chart is important to me.
Keep in mind though that paytience isn’t about inaction. It’s actually about measured action. It's not about waiting aimlessly, but waiting with a purpose. You shouldn't break your rules and double down on losers, or let a loser get out of control. GKT paytience is about having faith in your trading plan and the methodical math-based approach to trading that we preach and practice here at GKT.
Options trading is as much about mastering our emotions as it is about understanding the markets. That's why, in the race to financial freedom, slow and steady often wins the race. So remember next time you find yourself hovering over that 'buy' or 'sell' button, take a moment, take a breath, and ask yourself: Have I practiced paytience today?
Join the Good Kids Trading (GKT) community today, and we'll help you navigate the exciting world of options trading in a boring way! Yes, you really do want boring at least with most of your portfolio.