The best traders, the most successful traders, have a set trading strategy and strict trading rules, and they abide by them all the time. If you practice good trading discipline on only four out of five trades, that fifth trade is guaranteed to absolutely murder your equity. Here are some trading discipline rules you should guide yourself with.
- Develop a simple and practical and convenient trading system that works for you. You have to find a trading strategy and style that you are comfortable with. No matter how well a strategy may work for another trader, if it’s not comfortable for you, it won’t work for you. Don’t trade lot sizes so big that they make you nervous. Find yourself, your own identity as a trader, and be that person. You can always build on this system with time. Remember to use the demo account when you need to try out something new. You’ll be happier, and you’ll make more money.
- Trade only when there is a strong and accurate trade setup. A disciplined trader does not mind to trade for several days. He is like a hunter. He doesn’t waste his bullets when he knows that the prey is not close enough.
- Do not hesitate and do not over analyze. Confident successful traders don’t second-guess themselves to death. When their trading strategies give them signals to take trades, they take them. They pull the trigger. Once you’ve done your market analysis, in accordance with your chosen trading strategy, don’t go back and start redoing it just at the moment your strategy is telling you to initiate a trade. Here’s a handy tip: You don’t make any money if you don’t put the trade on. Being right about the market does you no good at all if you’re not in the market.
- Do not take too much risk. A disciplined trader never tries to make a huge profit by taking too much risk. He is always loyal to his risk/reward and money management rules.
- Always live to trade another day. No matter how badly you trade, the only “fatal” trading mistake you can make is blowing out your account and exhausting your equity completely. Anything short of that, you can recover from and become a profitable trader. But if you’ve got no money left to trade with, you’re sunk. Have a trading rule that will protect you, such as, “If my equity drops by more than 20%, I will completely stop trading for the day.” And follow that rule.
It is very important to be a disciplined trader. Trading discipline leads to trading success and every successful trader consistently follows strict rules in regards to their trading. Attend our free Forex freedom course to develop the trading discipline you will need to become a profitable Forex trader.
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