Forex trading discipline is one of the most important traits that a Forex trader should have to succeed in Forex trading. But trading discipline is also one of the hardest things to master. Laziness and negligence can be the biggest enemies of trading discipline and can hinder your growth. We all know how discipline plays a very important role in education and in the workplace. It is also crucial to ensure that you survive in the Forex market and achieve your goals with higher efficiency and less stress.
According to Mark Douglas, author of Trading in the Zone, self-discipline is nothing but a mental technique to redirect our focus of attention to the object of our goal or desire, when that goal or desire conflicts with some other component of our mental environment. For example, you may want to sleep or fool around on an important day when a good action is expected in the market. Discipline helps you to take your inclination away from the desire to sleep and makes you focus on what you need to do.
Self-discipline is not an inborn trait. You can actually practice and develop a good trading discipline if you work hard enough. It is true that it may seem difficult at first. But once you strictly follow your schedule and maintain discipline for about a month, it will become your second nature. Here are some steps to develop a trading discipline.
1. Set a concrete goal
In order to be disciplined in your endeavor, you must first set a concrete goal. Decide what exactly you want to achieve and put it in writing. It is better to write it down as a mission statement and stick it right above the screen that you usually work on. When you choose a goal, make sure that it is realistic. Having unrealistic and impractical goals will give you disappointment and discourage you from trading further. Setting a concrete and realistic goal is the first step to achieve a good trading discipline.
2. Keep a trading journal
Maintaining a trading journal and noting down your progress is a good idea to keep your trading discipline strong. Recording everything in a trading journal also lets you review it later. You can write your mission statement, everyday plans, details of trades placed, market observations and many other things in your journal. This helps you to be motivated and keep moving towards your goal.
3. Create and stick to a schedule as part of your trading discipline
If you work a regular job, you will be expected to strictly follow the timings of your workplace and your work schedule. In Forex, you have the liberty to be your own boss and trade at any time. But this may also lead to negligence. It is very important to create and stick to a schedule to do anything in an organized way. So decide the timings and the number of hours that you will be trading every day and follow it as perfectly as possible. This is an important thing to keep in mind if you want to develop a trading discipline.
Trading requires a lot of patience. First, you have to have the patience to wait for a quality trade set up. Many new traders do not have that and they end up chasing the market. Second, you have to be very patient and wait a long time before you can see good results in trading. Many new traders are likely to give up in the beginning. Aristotle said that patience is bitter but the fruit is sweet. That is true. In order to taste the fruit of success in the Forex market, a good amount of patience is required. Developing patience develops trading discipline and makes you focused on your goal.