Although traders should have a little more, 25% of discipline is important in everybody’s life. Every trader loses discipline at some point in the time in life as it is highly challenging to remain in discipline when trading. It is the emotions and state of mind that forces a trader to ignore his long term plans and trade in an undisciplined way. Whatsoever be the reason, it is necessary that a trader practices to overcome his emotions and remain in a disciplined trader’s routine.
Here are some important points that you should follow to stay in the discipline:
- Trading day should be planned beforehand
Yes, it is important to build your strategies and decide when to enter the market and when to exit. Do this beforehand so that you do not get confused when the price hits the point of profit opportunity.
- Be Confident
Have confidence in your study and strategies. Test it again and again to nail it as this is the only way to remain confident.
- But Don’t be Overconfident
If confidence is necessary, overconfidence is a fatal. Traders, especially beginners, after winning a series of trade become over confident and increase the position size in a short duration. This is really bad as it loses the balance caused by the discipline trader’s life.
- Don’t Listen to Others
Don’t change your trading strategy because your friend’s strategy looks better. Departure from this discipline in life increases the risk factor and invite losses as you are adopting others trade plan rejecting yours. You never know how he made that plan. So be cautious.
- Night Time is Sleep time
Forex market is open 24 X 7, but according to the rules of trader’s discipline, night time is sleep time. If you keep on trading day and night, you will lose concentration and take the wrong decision. Results: losses.
- Keep on Calculating the Tax
Profit from trading is counted as a regular income and comes under the regular tax bracket. So keep on calculating your tax so that you do not get shocked at the end of the financial year.
- Put in What you can Lose
Your position size should be according to what you can lose, and if you lose, you remain happy. What I mean to say is that if you lose the invested amount, it should not affect your regular as well as long term life. You should not face any financial problem after losing money.
Discipline in trading is exactly like on a strict, disciplined diet to lose weight. A person losing weight can eat junk once or twice a month, but if he deviates from the plan, the whole hard work will come back to zero. Same is the case with trading. You can try a new strategy or plan once or twice a month, but do not make it your habit and deviate from a disciplined trader’s life. Be patient and practice with new strategies on a demo account first before going on the floor.