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Thread: Trading psychology : discipline

  1. #1
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    Default Trading psychology : discipline

    Discipline, or a lack of, has a great impact on trading. At Stock-Market-Strategy we believe that a lack of discipline is the biggest reason for the high failure rate in trading. So what do we mean when we say discipline and how do we acquire it in trading? The discipline that is associated with trading has two different forms:

    1. Discipline to stay focused and hard working.
    2. Discipline to stick to your trading plan.


    Why You Need to Develop Your Discipline to be a Great Trader

    During Our Trading Career we have met many people who simply couldn’t find and maintain the balance between work and play. They suddenly found themselves stood without a boss, without a schedule or even without a specific work structure. You’re suddenly your own boss and at times you can feel lost and confused about what you should be doing within your day to day routine.

    This can mean that your days can either get consumed by jumping from one article to another not really absorbing anything of substance or distractions from friends that are also self employed or working shifts that think your time is a great way to pass their free time by hanging out and partying. Days can just disappear in front of a computer when educating yourself (which is good) but there are some people that do get distracted by computer based distractions such as games, chat rooms and forums.

    Make Trades and Make Money!

    If traders can get past all these problems there are more problems to tackle just round the corner! Like anything in life, people focus on the work they like to do so it is very common to find traders jumping right into the execution of trades as that is the reason that we want to become traders; to make trades and make money. But what we forget or don’t want to admit to ourselves is the more “boring”¯ part; the education. People simply find it more fun to pull the trigger than to study. Every trader should have the discipline to go through extensive studying and back testing and forward testing every idea before initiating any trades with real money.

    You have to consider your trading as a job/business. Get up in the morning, shower and get dressed. Just like you do when going to work. Work till lunch and take a break. Continue after the break. Try to get into a normal routine and gain some structure in your daily life.

    How to Acquire The Right Mindset in Trading:

    Finding discipline at the beginning of learning how to be a trader is very hard as you won’t really be trading as you will be studying. This means you don’t have the opening hours of the market to structure your day and you might find yourself studying at many different times of the day. So before you take the plunge and start to be a trader ask yourself; can you obtain and maintain the discipline to motivate yourself and to stay focused on trading and studying?

    After all the studying and hard work you can finally harvest the fruits of your labor. You have now developed a system and written a trading plan and success is just around the corner. Or is it? Many traders lack the discipline to follow their own trading plan, even if it is proven profitable. This lack of discipline leads to revenge-trading and over-trading which are two very dangerous things.

    Many traders feel the urge to put a trade on 1 min after being stopped out. Their conscience tells them they need to make back their loss and they need to feel they are right. This new trade is often against their trading plan, such as entry and money management. Many traders add a rule saying that you are not allowed to enter a trade right after you are stopped out. This is to avoid trading on emotions. You might even add to position size in order to make back the loss faster but this is again against the trading plan and a clear sign of lack of discipline.

    In the trading plan you might also have a rule saying that if you have made money on your first trade of the day you will sign off and enjoy the rest of the day. Alternatively you might switch to simulator in order to keep you on top of the game. If you lack discipline and get greedy you will likely keep trading and if the next trade is a loss you might put on another trade to make back the profit and so on. This can then lead to overtrading and eventually leads to losses. Every time you find yourself overtrading you have got to ask yourself are there really that many high odds setups?

    A Typical Scenario for a Trader Without Discipline:

    You enter your trade based on a spontaneous decision that is not part of your trading plan, and the trade starts off in your favour with a small gain but suddenly drops beneath the entry price. Because you did not make the decision for entry within the parameters of the trading plan you have no exit strategy…..

    You’re now in a position where you’re losing money and the only thing you have is your emotions to make your decisions……

    Your mind will be telling you don’t take the loss, it will bounce, and even if I get out at entry I will be happy (the hope phase!) but then it drops further! You’re now in a position where you have to take the loss as it is either going to get you margin called or you simply cannot take the emotional and financial pain …..

    This is a cycle we have to go through to understand and learn how to be a trader but is the hardest financial lesson you will ever learn. It is how you deal and cope with this that makes you a great trader! Discipline is ultimately a very important factor that needs to be conquered in order to survive trading the markets.

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    trading psychology is important in forex. Because then we will be able to trade with the maximum if we have good psychology. for that we can trade using small capital to train the psychology of trading. enough to trade using $ 10 in tenkofx we can use to train trading psychology

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    yes, psychology is a very important thing in forex trading. the key to success in forex trading is to have a good psychology. with good psychology we will be able to discipline and patience. So emotional, greedy can we minimize in forex

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    Discipline is very important in all aspects of life, and this is especially so for forex traders. A forex trader is definitely bound to fail when he or she does not have the discipline when trading. A right mindset should be adopted when you are trading. One of the biggest mistakes that almost all traders make at some point in their lives is not being disciplined. In forex trading, greed can cause the forex traders to lose their discipline.

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    Quote Originally Posted by Lucien View Post
    yes, psychology is a very important thing in forex trading. the key to success in forex trading is to have a good psychology. with good psychology we will be able to discipline and patience. So emotional, greedy can we minimize in forex
    Psychology is very important in forex because it has important role here. We can try to hone our trading psychology using small amount, like using cent account in TenkoFx. We can try to learn how to control our emotion in forex.

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    Quote Originally Posted by CahCuncun View Post
    Psychology is very important in forex because it has important role here. We can try to hone our trading psychology using small amount, like using cent account in TenkoFx. We can try to learn how to control our emotion in forex.
    Controlling emotion will be the hardest thing which are done by trader in forex. But we must do it if we want to earn more maximal profit in forex. We can try to use real account with minimum deposit in a broker and let's start to learn how to control emotion.

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    Among other things in forex, psychology is very important. Trading psychology is an attitude. Every trader needs to develop it to become complete. For me, i was able to work on my psychology to become better in forex using other books and real life biography and autobiography of successful legends in the past. It is not so difficult to achieve, but it is also tasking like strategies.

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    Quote Originally Posted by tenkofx View Post
    Among other things in forex, psychology is very important. Trading psychology is an attitude. Every trader needs to develop it to become complete. For me, i was able to work on my psychology to become better in forex using other books and real life biography and autobiography of successful legends in the past. It is not so difficult to achieve, but it is also tasking like strategies.
    Yes, every trader is in forex, must has good trading psychology and they must try to hone it using small amount. One of broker which given an ease to start trading is FreshForex. Trader can try to maximize it to hone trading skills

  9. #9
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    Quote Originally Posted by Lucien View Post
    Yes, every trader is in forex, must has good trading psychology and they must try to hone it using small amount. One of broker which given an ease to start trading is FreshForex. Trader can try to maximize it to hone trading skills
    psychological factors play an important thing. every trader must have a good Psychology so that we can get the stability of trading. now I try to be trading with the psychology of a controlled. TenkoFx also gives the option to the traders with the minimum deposit account

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    In forex trading, discipline means following your trading system rules strictly and precisely. Over 95% of forex traders lose, not because they do not have a good trading system or they have not learned the techniques. They lose because they fail to follow their trading system rules. They lose because they have no discipline. When you ask them about the techniques, indicators and systems they use, they explain very well, but when you ask them about their trading performance and whether they are profitable or not, you will see that they are not profitable yet.

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