Trading takes alot of discipline. Good traders always make a set of trading rules and stick to it. They have already calculated their exit positions even before trade entry. Planned trades always work out better than no-exit strategy trades. That said, most traders always end up breaking their own trading rules. More often traders will lose money or make a smaller profit by breaking those trading rules.
One key ingredient to be a successful trader is to be patient. Patience pays off sooner or later. I didn’t bank much profit on the following trade because i broke my own rule and lost my patience.
Mindray Medical International Limited is developer, manufacturer and marketer of medical devices in China. The ticker symbol is MR.
As you see, MR has strong resistance at $40. Knowing this fact, I entered a short position at 39.95. (1000 MR short @ 39.95). I expected it to crack back to lower 39’s by afternoon. However from 11.30 am to 2.30 pm MR was trading absolutely flat making it an extremely boring trade. I had planned to cover at $39.05 for a $900+ profit with a stop at $40.15 just in case it broke the resistance. Turns out 3 hours of flat trading made me lose my patience and i covered at $39.90 with a lousy gain of $40 after commission. Just 2 minutes later, MR cracked. It cracked below $39. This would have made an excellent exit….
Rule: Be patient with your trade.