You have probably read that discipline is a key element of becoming a successful forex trader. Discipline is important in many ways, it is what stops you from making trading errors, like taking too large a position in the market or making trades that have nothing to do with your trading methodology.
Without discipline you will make numerous mistakes. Trading simply to be part of the action is probably the most common mistake, people sit in front of their screens all day long and can become hypnotised by the movement in the forex market. They may have seen an entry but they didn’t take the trade, when they see the market trade in the direction that they wanted they become extremely frustrated as they are missing out on profits. After the market has move a long way they finally decide to enter, but of course this is too late and they end up losing money.
To combat this type of trading you need to create self discipline. Self discipline will stop you from going in too late, and it will make you get in when you should have. Creating self discipline is not that easy. But below I will show you a simple exercise that will help you become a more disciplined trader.
First of all this exercise will only suit longer term traders, especially those who only enter their trades at certain times of day. For me this is every 4 hours as this is when the candles close and its then that I trade.
So say you are like me and you look for trades 4 or 5 times a day. What do you do the rest of the time? Chances are you sit watching the market. This is a very bad thing too do and it will cause you to make emotional errors, like exiting perfectly good trades, just because you are watching it retrace against you. It will also make you enter trades you shouldn’t.
To combat this try this two week challenge.
Simply work out exactly what times of day you need to look at your charts, then for the next two weeks, only look at the markets at these times. DO NOT look between these times.
For most people having a position on means they want to check it every 5 minutes, by forcing yourself to not look you are creating discipline. You see you have had to discipline yourself not to look.
If you cannot do this how do you ever think you will discipline yourself to trade properly? Exactly! By staying away from the market you remove the emotion from trading, and are less prone to making trading errors, and at the same time you create discipline and an structure to your trading that it did not previously have. Creating a daily routine and sticking to it will pay dividends to your performance.
Try this for two weeks and see if it makes things better, if not tray again. This is one of the techniques I have used and it worked pretty well for me. Once you create discipline you may become more relaxed about when you look at the market again, so long as you maintain discipline.
See my website for more information on discipline. www.forex-trading-uncut.com
Safe trading
John
