The foundation of all functional trading strategies is discipline. Without discipline, you’ll be harmed by the risks of active trading. These risks include fear, greed, and missed opportunity. Only by holding yourself accountable and remaining disciplined in this current time will you be ready to achieve your trading goals.
If you put you focus in your trading strategy before learning discipline, the process of your strategy won’t really matter. Discipline is what makes successful trading strategies possible. Discipline is why technical indicators, risk management techniques, and trading principles pay off finally at the end.
It is very easy for traders to feel overwhelmed. Once losses begin to compile, it can often be very tempting to take an early exit. Once gains accumulate, it can be very tempting to press your luck. Disciplined traders aren’t distracted by any particular price movement. They realized that their trading strategies produce net gains over-time when applied correctly.
As the foundation of trading, discipline is what is going to allow you to place your trading knowledge to good use.
3 Steps to Becoming a Trading Discipline Master:
Becoming a successful trader must require time and practice. However, there are still quite a lot of things you can do to enhance your level of discipline. When designing an efficient trading strategy, keep these subsequent things in mind:
- Have a transparent set of trading discipline rules to follow— If you don’t have guidelines how will you be ready to follow them? You can’t. So, set up some rules and begin to follow them.
- Start with something easy and grow your discipline — the efficient trading strategy for you is one you fully understand. Traders are likely to lose their sense of discipline when they are overwhelmed, nervous or confused. Once you begin small and start to possess success following your rules, you’ll gain confidence. Not sure where to start? Find the best trading strategies for your needs
- Make Your Goal Following Your Rules – Traders want to get money! However, we need our foundation first. If you can’t build a foundation then you’ll never ever make money trading. So, until you master following your rules, make it your goal to follow the principles, then from there when it’s established then you start to tweak elements of your strategy which will launch you into profitability. Here you’ll learn on the way to fade the momentum in Forex
Making trading rules is surprisingly easy. Begin by developing a consistent trading strategy. Trading at similar times of the day and holding positions of comparable lengths will make your moves far more predictable. You should also only use trading platforms and asset classes that you fully understand. Within your comfort zone, there are still many opportunities for profit.
Ask yourself the following questions:
- What technical indicators should you use?
- Are you a risk-tolerant trader?
- Which assets do you hope to trade?
- What are your current trading parameters?
- Are you comfortable issuing stop-loss orders?
It will help to write down each of your rules down. This will make each rule easier to remember. Eventually, following these rules will be instinctual. Discipline will remain important, regardless of your trading preferences.
More Ways To Build Trading Discipline And Up Your Game
Capital. Ironically, the easiest part of your job is mastering the most advanced trading strategies. The market knows where you live and how you think. It has a supernatural talent to hit you where it will hurt the most at the most inopportune times. So how does one overcome this overwhelming barrier, especially when most traders will eventually fail and wash out of the financial markets?
In reality, most traders crash and burn because they lack discipline instead of the lack of knowledge. Internalizing this single piece of wisdom will become your greatest obstacle in taking advantage of speculation. To re-phrase Edison Thomas classic observation, successful trading requires 1% inspiration and 99% perspiration.
That is to say, turning reliable profits is also 1% prediction and 99% observation. We get caught in the game of guessing the future, rather than just managing what’s right in front of our noses. According to Richard Alpert a psychedelic guru, your only job is to “be here now,” responding to the flow of the ticker tape. Everything else will take care of itself.
How do you master that management skills that is required to survive as a market?
Speculator? Start by taking firm control of your pocketbook with this information above.
Honor your stops. Stops force you to consider the place where you screwed up and need to get out of the market. In truth, every position will go exactly where it wants to go, despite your best wish and hopes. And even for no good reason, perfect trade setups will fail regularly. The most important factor: Traders are not investors, so stop acting like one.
Have a trading plan and follow it. What actually are you trying to acchieve with the stock you sold short today? You’re in extreme danger if you do not know the solution before, you’re taking the risk. So, outline your strategy beforehand then stick with it completely.
Trade small, smaller and smallest. Leave big risks to the market professionals. Big risk blinds us to the huge picture, because it becomes more important than the good pattern or setup, we’re using to get money. Taking smaller positions will surely give you higher control over the time element. The failure to regulate the time element is then that single biggest reason why traders lose money.
Match your trading to your lifestyle. Do you day-trade your investments, or invest in your day- trades? In either case, it’s a sure way to lose money. Do you look at 100 charts every night when you only have time for five or 10? Honestly, your performance will blossom if you’ll master a little list of excellent opportunities and stop worrying about big basket of stocks that you simply do not have time to follow every day.
Take a giant step back from the intraday markets. The flood of micro-data will fry your brain and close down your intuition. You’ll also forget how to make money. Dump Level II and most of the market “tells” you’re watching every day. Then refocus your attention on the larger numbers and longer-term swings.
Before swinging for the fences, learn to hit singles. Forget your unrealistic profit goals and just consider taking a couple of bucks out of the market every day. Want to know a secret? This little advice will build trading discipline and profits faster than attending a dozen trading seminars.