Doing nothing can be an awful waste of time, or it can be the most productive thing you can ever do.

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For instance, we all know how to lay around and do nothing. Easy, right? This is where doing nothing can be a waste of time.

Now, what if you were to apply that skill when trading? You see, in trading, patience is not just a virtue. It’s gold! Sometimes you can accomplish the most by doing nothing.

But paradoxically, when trading, that is when we feel the urge to become more productive all of a sudden. It’s like our mind won’t let us enjoy doing nothing, we have to analyze, anticipate, worry, stress, tweak… This shows a lack of control over oneself and, in this field, it doesn’t work very well in the long run.

The reason…

You have thoughts…

Have you ever noticed that those thoughts tend to occur constantly?

Have you ever noticed that some of those thoughts are visual —  you have memory/plan/fantasy/scenes just popping up like that in that space you call mind.

Have you ever noticed that you have sensations all over your body – inside and outside of it; pleasant, unpleasant; some of which are physical, some of which are emotional?

Have you ever noticed that these experiences – thoughts and sensations – are continuous?

You’re constantly pulled to mental states and body states, and, most of the time, you understand (implicitly) that: “this is me… This is who I am and, by extension, this is how I have to act.” Have you ever noticed that too?

Then, next thing you know:

• You’re entering your trades at the wrong time
• You’re exiting at the wrong time
• You’re removing your stop-loss
• You’re increasing/decreasing your position size, and doing so against your rules.

This is a problem because trading is mostly a waiting game where you have to strike only when the time is right. If you want action that happens on your own terms, you’re in the wrong field. It’s very strict in that sense and you can’t afford to be a slave to your thought process without even being aware that you are. This can be very costly.

You see, the market does not hurry, it moves at its own rhythm, on its own time. If you can learn to be patient and “do nothing” when nothing is required, you’ll save yourself an enormous amount of time and energy. You’ll just let the market do its thing and you’ll let trades come to you naturally, without forcing things.

And this is a learnable skill!

So let’s try a little exercise…

The Do-Nothing technique

Posture: Right where you are.

When: While waiting for your entry signal; while waiting for your exit signal.

Instructions: Just allow your mind to do its thing. It will generate stories and your body will generate feelings urging you to behave in a certain way. Your aim is to tolerate being there with yourself without trying to change or control anything. Just be there.

Let your attention go anywhere it wants to. You can fantasize about the perfect trade that yields you 1000% return; you can worry about missing out on an incredible opportunity; you can fear a loss; you can think about nothing or everything.

But notice where your mind goes. Tune in to that part of you that simply notices what you’re thinking and feeling instead of being automatically captured by those different states. That observing quality of your mind notices things in a neutral way.

And that’s it. That’s the whole technique!

Now, the do-nothing technique is more readily applicable for day traders since they have to be in front of their screen during the entire process, from trade selection to the exit. But that doesn’t mean that swing traders or position traders can’t make use of it. In fact, you can use it anywhere, anytime, in and out of the market.

It helps you tolerate whatever your body and mind do, which helps you overcome impatience. Impatience is you trying to force things to happen by thinking them, more strongly or more often, without paying very much attention to where things actually are at.

On the other hand, when you’re patient, you’re a keen observer of what’s happening. You notice when there’s an opportunity for something to happen, and when there isn’t yet. You notice that things develop through different cycles, and different things happen at different points in the cycle. In other words, you drop the need to create action on your own terms, you only respond to action in a systematic way whenever it appears.

Tip #1 – It takes practice.

It’s OK if you find it hard to do the do-nothing technique at first, but this is where you start from. By the way, Tom Basso (hedge fund manager interviewed in The New Market Wizards ) uses a very similar technique.

Tip #2 — You are intentionally doing nothing.

You do not even have to approach this as a meditation technique, although you are free to. Notice what your attitudes are, and do not defend yourself against anything. Whether you are bored, happy, tired, excited, anxious, fearful, greedy, restless, you welcome it all. Your goal is to just observe yourself experiencing those different states. You cannot fail at this.

Tip #3 – Notice the urge to take action.

If you have a lot of noise in your head, you may find yourself wanting to take action in some form – entering (or exiting) before you even get a signal. As said, all that “noise” or mental rehearsal is not a problem and is not to be resisted. When you resist the noise, it only gets louder.

But just this act of noticing the noise is extremely powerful because it allows you to see what’s going on in your mind and body as if from a third person perspective. This begets objectivity and you can then say “Okay, this thought, or feeling, or urge is not in line with my rules, so I will not act on them.”