What do you think the key for Forex trading? It is not the perfect strategy, but PERFECT DISCIPLINE. Discipline is a controlled behavior. So in Forex trading you must have a controlled behavior which follows your strategy. Discipline will separates you between success and failure.
Have you ever set your trading goals, set your stops and limits but eventually forget about that. You have your strategy but still didn't do the strategy and enter the market although it is not suits your strategy. And finally LOST your money. How could that happened? It's because you lack DISCIPLINE. Many beginner trader and some experienced trader too, often enter the market because they are tempted to go in due to the fear of missing out a big move although it breaks their trading rules.
First you need to set your trading rules. Write on a paper your rules. Here's my rules:
- Enter the market when there is higher high and higher low or lower high and lower low.
- Start closing my position if it breaks #1 rules.
- Only risk 1% of capital for a position.
- Use a stop order (15 pips) and limit order (20 pips).
- After three losing trades I will stop trading for the day. Usually if I continue trading I will lose more.
Second. Here are some tips for your discipline:
- Be easy on your self for your mistakes. The more you get upset with yourself for your mistakes the more it will influence your future trading.
- Keep practicing on a demo account. Set a goal, if you haven't got 50% return you will not go for real trade.
- After every losing trade close your Forex platform. This will you get you some time to cool your self.
- Put a Post-it note at your screen to be discipline so you remember to be discipline.
- If you find yourself praying for the market then this is not a good condition. So close your Forex platform immediately.
- Have your spouse accompany for your trading. She/he can reminds you for your action.
- Use a demo account and have your spouse to trade for you. When you want to enter the market, you need to talk to him/her. This will slow your action and make you thinks clearly.
- Relax and visualize your self of your mistakes. Imagine your mistakes. Imagine your loss because of greed. In your mind see you takes defensive position for your next trade. Imagine every details of next trade. Do this often to change your mind.