Staying disciplined while trading can be challenging, especially when price action gets extra volatile and you’re tempted to just chase big market moves.
Here are some firsthand tips from our trading forum members that might help:
1. Practice, practice, practice
When it comes to forex trading, practice does not necessarily make perfect, but it does make progress.
Practice is the answer.
Discipline for traders suggests they wish emotionally to do something which they know intellectually to be wrong.
Sufficient practice for their reaction to become automatic removes the conflict. Nobody needs to use discipline to walk or run or breathe or ride a bike or write – discipline is irrelevant because the task is wholly automatic. – tommor
Of course the quality of your practice matters more than the quantity of hours you put in. Experts in a particular field – be it sports, music, or academics – often credit deliberate practice in seeing significant and consistent improvements in performance.
I would recommend to you to practice. In the beginning try to stick with your strategy for 5 deals, then increase it to 10, and so on.
No matter what happens during this period of trading time, try to stay disciplined for your defined number of deals. – Hasturen
By routinely reviewing price action and the trades you’ve taken, you can develop the habit of staying disciplined and more aware of making better trading decisions.
In taking note of your common trading mistakes, you’d know what pitfalls to avoid in the future and (hopefully!) steer clear of them. And in knowing what you do well, you can also identify which strategies can give you a better probability of success.
1. Spend time understanding your weaknesses and strengths in the trading markets.
2. Analyse yourself on a daily basis. See what all trades have you placed on a particular day and observe their price movements. – pete_pips88
Through these, you’ll be less prone to making haphazard trading decisions and have enough discipline to stick to tried-and-tested approaches instead.
Nope, meditation ain’t just for monks or yogis! It’s been proven to have huge benefits for traders, too.
Meditation; it quality helps me a lot! I always do meditation before opening my trading chart (at morning). – Peter_Siddle
Trading is, more often than not, a mental performance. Your decision-making is often influenced by how strong your brain muscles are when it comes to reacting to market conditions or practicing restraint.
Just as different muscle groups are strengthened and toned through working out, meditation helps exercise your mental biceps and glutes to withstand any stress or information overload from trading.
4. Know when to stopOn the subject of knowing when to stop, it’s also important for traders to acknowledge when the market environment isn’t optimal for certain strategies. During these situations, it might do more harm than good to force trades.
Market Wizards author Jack Schwager mentions “the importance of doing nothing” as a key component of successful investing but adds that it “requires the patience of a saint.”
[The] key to becoming a discipline trader is knowing when to stop and that can be achieved by preparing a daily budget beforehand. Well at least, that’s how I learned. – gray26
Apart from identifying unfavorable market conditions, other valid reasons to stay out of trades is exceeding specified risk requirements or going beyond time limits.