“The beginning process is having a trading discipline, maintaining that discipline is the evolution phase and then the success is staying with that trading discipline.”
The most complex and multifaceted zone is the financial markets where the traders have to face and engross the massive volume of information. Therefore, the traders must be patient and disciplined while trading in Forex to evaluate the data, its trends, and make decisions.
The first requirement is to have discipline, when currently there are no opportunities then it requires nothing but traders need to be active for the possible opportunities in the future.
When an opportunity pops out in the future than to execute actions promptly, the traders require discipline. It is obligatory to entail the discipline once in a trade to lead the plans of trading.
Only disciplined traders possess the ability to understand and recognize the different aspects of psychology related to trading.
The following points are essential for constructing a trading plan and a trading discipline to prevail in Forex trading.
a) Develop a trading plan, which must address the facts such as time, risk management, conditions, market, entries, stops, and targets including goals and objective levels. Besides, the plan must discourse the approaches of how will you exit the trade in case of worst conditions?
b) Create a disciplined system of entries and exits in trading and if it works then never deviate it.
c) Trade at a comfortable level and minimum size to avoid loss, as there is a correlation between the size of a trade, its risk of loss, and the emotionality level of traders.
d) Always take trades, which fulfills your set criteria or targets.
e) Keep a spreadsheet and a ledger of your entry levels, stop levels, profits, losses, and progresses for each trade and revisit this once in a month then analyze which was your biggest individual profit in that particular month.
f) Evaluate and note down the extent of your profits like by how much the profits have been increased as this will be a factor of motivation to stay at the top of your losses.
g) Evaluating the extent of profits can be used as an edge and way to give an extra bit of discipline to stay away from losses as you can shut down or stop the position, which is falling into losses by comparing the activity with the previous month.
“Be a trader, not a speculator, and use short term trading because it is greatly effective if you want to have a winning day or a week.”
Always set your trading strategy or approach which you will always follow by considering the risk and reward ratio. Think through the quantity of money, which you can offer, and trade. Altering the strategies with each of your trades is an indication of an indiscipline trader.
“There is a tie of discipline between objectives and success.”
To make a comprehensive plan, a disciplined trader thinks through a variety of phases such as profit objectives, capital, and margin ratio along with risk and rewards portion. It is important to have realistic objectives to make sure worthy of trading discipline.
“Problems and complexities in Forex trade cannot be resolved or vanished with the help of a magic wand. All you need is to work and have discipline.”
Risk Management and Recording Trades:
A trader’s mind must always think about a factor, which is risk management. Always be disciplined depending upon your approach to risk and think about your stop loss and take profit stages.
The unexpected tendency in reversals can occur because of the sensitivity of the currency market to geopolitical developments. Other factors such as weak trading approaches and short term advantages may lead to failure.
To avoid the losses because of these factors, trade ledgers, journals or recordings can be expedient. This will help the traders to learn from previous events and improve their strategies.
Control Your Emotions and Be Patient:
The worst and the prevailing element is the emotion in Forex Trading. The negative emotions such as anxiety, terror, panic, nervousness, and confusion may lead the traders to lose their focus on the trade. Besides, sometimes the traders get greedy about their winning trade and thus results in losing their positions. The greed of making bigger and bigger profits ends up in losing the previous profits that is why patience is the major key to success.
“Stay patient all the time and have faith in the Forex trade journey.”
Mentally Prepare To Lose Money and Ready To Face The Results
It is a famous saying “no pain, no gain” which indicates that if you want to achieve something then you need to do work hard because good things do not come to those who do not pay for it. Similarly, if traders will always reluctant to lose their money then they cannot enjoy the profits resulting from it. Build an attitude of accepting losses otherwise you will be failed in trading.
Trading discipline indicates that keep the factor of failure or losses in your mind and get mentally prepared while coming into the forex trading.
“Control your mind otherwise your mind will control you.”
A disciplined trader needs to have a clear trading strategy, achievable realistic goals, and a mentally prepared approach to losing money.
“Discipline is all about doing something, which is required even if you do not like it because it turns the table into success.”