More Money In Your Trading Account Than You Think

How much do you value your time? I’m willing to bet quite a lot, in fact most of us value ‘free time’ more than anything else in the world, because as we all know, our time is limited to one relatively short lifetime on this planet. But if we value time so much, why is it that so many traders are seemingly unaware of the power and value of time in regards to how it can significantly affect their trading performance? In today’s article, I am going to discuss the importance of time in trading and how utilizing it properly is often the difference between success and failure in the market. The power and monetary value of simply not trading, is vastly underestimated by most traders and until you understand why you should think of time as an extremely valuable commodity, you will continue to struggle in the market.

Time = Money. Literally.

I want you to start thinking of time as a ‘currency’ that is part of your trading account balance. The more time you have the more value you have, we can all agree on that. In trading, it is literally true that time is equal to money, if you utilize your time properly. Let me explain… First off, the only way you can lose money in the market is by having a losing trade (“brilliant point Nial” you’re thinking, read on it gets better, I promise). Think about it like this, when you are sitting on the sidelines in the market (not trading), you can’t lose money can you? Avoiding losing trades, as well as not giving back profits you made on winning trades are the two main ways that time spent not trading can help you grow your trading account faster. It’s counter-intuitive for many of us, because as humans we tend to think ‘more time’ is better in anything; our job, school, sports, you name it…more time spent doing something is almost always a part of the path to success. However, trading is a different beast all together because spending more time in and out of trades is typically not what equals success. Trading success is found by picking your entries very carefully and waiting patiently for the most obvious trade setups to ‘come to you’, which typically involves much larger stretches of time spent not trading in between trades than what most traders are used to. Most traders fail, everyone knows that, we’ve all heard the 90% failure rate thing, and sadly it’s probably pretty accurate. Are most traders patient and disciplined? No. Thus, if most traders are not patient or disciplined and most traders are failing in the market, then the logical inference to make is that you need to be more patient and disciplined as you trade. This basically means you need to trade less frequently and give more value to the time you spend not trading than you currently are. The approximate 10% of traders who become very successful in the market have the SAME amount of hours in their day as you do in yours. However, what they have learned is that by sitting out on low-probability trades and mastering their trading strategy to the point where they know when to trade and when not to, they are able to use time to their advantage in the market.