How to Satisfy Your “Patience Itch”

It’s rare, but three winning long January call positions never gave me an exit signal all month heading into expiration.

$ON and $MU just kept chugging higher. Meanwhile, $HON didn’t really do anything — which wasn’t bad considering I was sitting on some nice gains. I ended up closing the positions and booking my gains on expiration day for all three positions.

I say this all the time, but patience is so important in this business. And I harp on it because it is easily one of my biggest flaws. I’ve struggled with patience my entire life, and I’m sorry to report that I don’t really feel like I’ve made much headway toward “fixing” it. I deal with it every day, in everything I do. And now I see it in my 6-year old son and it triggers me to no end.

Obviously, this lack of patience manifests itself in my trading time and again. So instead of promising myself I’ll be more patient next time (LOL, I won’t), I put in processes that help me counteract my impatience.

One of those processes was on display with these ON, MU, and HON positions. In each of these positions, I sold half of my position when I had doubled my money. This does two things for me:

  1. It satisfies my patience itch — allowing me to be proactive and do something. In this case, taking my original capital risk off the table.
  2. After satisfying the itch, I can now rest easier knowing that holding out for homerun gains won’t cost me anything. Worst case scenario, the trend reverses and the remaining calls expire worthless. But since I’ve already sold half at a double, the net result is a wash. This, my friend, is the epitome of an asymmetric return!

What are some tricks you employ to keep your inner demons in check?

Let me know…