Usually the concept of «discipline» presupposes the mandatory implementation of rigidly established rules, norms, laws. The modern financial market − is a multifactorial mathematics, distributed in time, combined with intuition and psychology.
This means that understanding of the requirements of the market and trading strictly by the rules should provide the trader a positive result in each transaction.
... It is mandatory recommended to all who want to have permanent personal protection for their money, and − for free. Trader's Discipline, by analogy with the usual order, involves a whole system of the «penalty points» and «punishments».
Traditionally, the main negative is a financial loss, then − in terms of the degree of harm to the trader there are: psychological breakdown, loss of health, crisis of confidence and other physical and psychological problems. (here − the classics of trading on this subject!)
The strategy of survival in the financial market is on three pillars − money management, self-control and optimal conditions for trade. Violation of any of the principles leads to disaster.
We begin with the most important factor.
Money management is much talked about and written, shown and warned, but in real operations it is used by no more than 10% of traders. This is just the «statistical» percentage of the players who actually make a profit. Inefficient management is the main reason for losing money, and even experienced and technically savvy traders go through this (webinar on the topic of the trading discipline).
Do you want money? Be prepared to comply with the following rules:
Only after acquiring sufficient experience in the trading strategy you can try to include, for example, professional hedging tactics, riskier assets, intuition and complex fundamental analysis. But even then the observance of the rigid management is mandatory; this will save you not only a trading deposit, but also nerves.
By the way, let's just talk about health ...
None, even the most effective trading strategy cannot do without losses, primarily because of the human factor. Today traditional clients of the psychotherapists − are all kinds of the financial losers, including losing traders.
The key success in trading is emotional discipline. If the most important was the presence of the mind, then many more people earned money.
In general, the psychological state of trader suffers from three problems: ambition, panic and self-deception.
Unreasonable ambitions quickly disappear when the first losses are received − and there is no more effective cure for this disease. However, successful traders retain a reasonable level of ambition − this is an excellent incentive for continuous development.
The ability to panic depends on stability of trader, and most often it is corrected in one of the three ways: a temporary stoppage of trades, additional training or a final exit from the market.
The problem of the self-deception is solved simply: trader should not lie to himself and really observe discipline in each transaction. If you secretly tighten your favorite cigarette, but at the same time you all claim that you stop smoking, you will never get rid of a bad habit.
If you learn how to take current losses as a statistical probability, then in the future you will have the strength to conduct a thorough analysis of your actions, adjust your trading strategy and reduce potential losses.
Even non-observance of the discipline in everyday life adversely affects trade decisions, so a trader should increase the level of household self-control (costs, promises, habits, working regime). This tempers the psyche and strengthens ability to trade strictly on system. So do not miss the next stage ...
The majority of the newcomers consider trading as an opportunity for quick and comfortable earning, and therefore expect profit as a result of the winning, rather than the full-fledged work. As a result, even the small household discomfort leads to real losses and to a greater stress.
The cure for such problems is simple: trade should be organized as an effective workflow, regardless of your experience and the size of the deposit.
This means that ...
Either write something worth reading or do something worth writing.
So, you think that you are ready for independent trading? What’s the problem?
The financial market is always an absolute freedom and absolute risk. Even if it is carefully calculated and technically justified, there is always a risk of loss, and you need to accept this as a basic truth: the fact that part of your transactions will necessarily be unprofitable.
The market constantly presses on the trader by a lot of the random factors, but your self-control should not turn into fear of the transaction, as well as unreasonable persistence shouldn’t turn into the obstinacy. You have to be disciplined in trade, but you do not have to be a robot (see three steps to trader's discipline).
Look at it this way: you will never check your correctness until you open a trading position − the constant expectation of a more reliable «chance» postpone your earnings. Completely no risk is only at an undisclosed trade. No trade − no income, even if you think correctly.
Do not overcomplicate your analysis, do not skip the entry point, if your trading system allows this. Market is indifferent about you − it goes wherever it wants and will always be right. Simply, it punishes those who play out of the rules and violate the Trader's discipline.
I am not a product of my circumstances. I am a product of my decisions.
An excellent incentive to continue trading − getting at least a small profit, but − every day. Profit, as a confirmation of your correct decision, is much more effective than the result of any financial «punishment».
From the moment when transaction is opened, result of the spent trading day is determined by your behavior. It is necessary to make a personal instruction and begin day with its study; with the acquisition of experience, the Trader’s Discipline should, first of all, be conscious, not just rigid.
Do not enter the market without preparation and do not allow critical losses − you should always be able to analyze errors and return to market. If your Trader’s Discipline is brought to automatism, then at the end of the day, your small income will bring a stable profit. And if not − prepare for losses.
Trading psychology is one of the essential pillars of the Forex success, so even if you are an experienced trader, you shouldn’t dismiss a trading psychology advice.
Do you need a comfortable space in order to take control over your emotions and get prepared to the live trading?
Simply download Forex Tester for free. In addition, you will receive 17 years of free historical data (easily downloadable straight from the software).
Grow your patience, boost your trading skills, learn to avoid psychological traps without drawing your live account.
Share your personal experience of the Trader’s Discipline observing. Was this article useful for you? It is important for us to know your opinion – leave your comments below!