With 5 months to go in 2019, ask yourself this " how much of the profit you make are you actually cashing out?" How do you master the management skills required to survive as a market speculator? Start by taking firm control of your pocketbook with these 10 ways to build market discipline.
Trading is a lot more involving than it looks. You can study all the books, pay homage to all the market gurus, and still fail to profit when it's time to risk your own capital. Ironically, mastering the most advanced trading strategies is the easiest part of your job. Applying those skills in a stomach-wrenching tape is far more difficult.
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 do you overcome this overwhelming barrier, especially when most rookie traders will eventually fail and wash out of the financial markets?
In reality, most traders crash and burn because of a “lack of discipline” rather than a lack of knowledge. Internalizing this single piece of wisdom will become your greatest obstacle in profiting from speculation. To paraphrase Thomas Edison's classic observation, successful trading requires 1% inspiration and 99% perspiration.
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. In the words of psychedelic guru Richard Alpert, your only job is to "be here now," responding to the flow of the price tick. Everything else will take care of itself.
How do you master the management skills required to survive as a market speculator? Start by taking firm control of your pocketbook with these 10 ways to build market discipline.
- HONOR YOUR STOPS. Stops (stop loss, trailing stop, etc.) force you to think about the price where you screwed up and need to get out of the market. In truth, every trade position will go where it wants to go, despite your best hopes and wishes. And even perfect trade setups may fail regularly for no good reason. The bottom line: Traders aren't investors, so stop acting like one. Act like a Trader!
- HAVE A TRADING PLAN AND FOLLOW IT. What exactly are you trying to accomplish with the currency pair you sold or bought today? You're in extreme danger if you don't know the answer before you take the risk. So outline your strategy beforehand and then stick with it.
- TRADE SMALL, SMALLER AND SMALLEST. Leave big lots to the market professionals. Big risk blinds us to the big picture, because it becomes more important than the great pattern or setup we're using to make money. Taking smaller positions gives you greater control over the time element. The failure to control the time element is the 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 each night when you only have time for five or 10? Honestly, your performance will blossom if you can master a small list of good opportunities (say, the Forex Majors or Precious Metals) and stop worrying about a big basket of assets that you don't 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 shut down your intuition. You'll also forget how to make money. Dump insider analysis and most of the market "tells" you're staring at each day. Then refocus your attention on the bigger numbers and longer-term swings. You don’t have infinite money.
- LEARN TO HIT SINGLES BEFORE SWINGING FOR THE DOUBLES. Forget your unrealistic profit goals and just concentrate on taking a few bucks out of the market each day. Want to know a secret? This one piece of advice builds discipline and profits faster than attending a dozen trading seminars. Successfully & repeatedly make $1 or $10 profits daily for a week or month, then you can scale up to pursuing $50 to $1000 consistently.
- PRACTICE YOUR ENTRY/EXIT DRILL. Then practice it again until you can do it in your sleep. We all face the continuous threat of big losses. You'll need to act quickly and without hesitation when the crypt-keeper puts his icy hand onto your trading account. Prepare mentally by visualizing an emergency exit for each trade. Then head for it at the first sign of trouble.
- TURN OFF THE FINANCIAL NEWS AND GET AWAY FROM THE CHAT ROOMS. Guess what. Your opinion is the only one that counts when you put your own capital at risk. The parade of talking heads and market gurus will make you question your strategy and discipline at exactly the wrong time.
- READ A GOOD BOOK OR TWO. Start with “The Disciplined Trader” by Mark Douglas, and study it in detail (I can give you a FREE COPY if you want, simply ask me). He'll explain why you wanted to make money in the Forex market in the first place. Then you can finally start to turn things around.
- FIX THE REST OF YOUR LIFE. We smoke, drink and eat too much, but will want to trade like Warren Buffet when we jump in the market. Sadly, if you have no discipline in the other areas of your personal life, you won't find it in the trading game. So work on fixing your bad habits and get a good night's sleep. You'll be amazed how much it helps your bottom line.
I am interested in your trading success & have 2 offers that will interest you and help you trade better,
- A copy of “The Disciplined Trader” by Mark Douglas to rally your discipline,
- An offer to join the first edition of our “Trade With Me” Live session, where you will trade live with our analysis team for a certain duration. (All analysis provided live by the team)
Which ever you choose, endeavor to make a move this week, it's the only way forward. I look forward to your comment below.
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