Lack of Discipline
Discipline is a very broad word when it comes to trading. But it all comes down to one sentence, if you have the discipline required to be a good trader, your chances of success in this business will get higher, if you don’t, you need to work on it so you could reach your trading goals.
It requires discipline to develop your trading system. Most of us are eager to enter a trade when it all begins. But if you don’t develop the guidelines to follow on each trade, I am afraid the trading adventure will end sooner than you think. It requires time, effort and hard work to develop the system.
It requires discipline to follow your trading system. As stated before, there are no better decisions than those made by following your system. Take for instance the following scenarios:
1. You followed your system and made a winning trade.
OUTCOME: You will gain confidence in yourself and your system
2. You followed the system and lost the trade.
OUTCOME: Losses are unavoidable, you followed you system and it will give you confidence in yourself, because you know losses are part of this business.
3. You took a trade with no signal from your system and lost.
OUTCOME: You made a mistake and it turned out as a negative experience. You will now think it twice before entering the market with no signal.
4. You didn’t follow your system and didn’t take a signaled trade that turned out a winning transaction.
OUTCOME: Confidence in yourself will drop substantially.
As you can see here, mistakes are to be valued in terms of the decision made, not in terms of the money made or lost. We will develop more on this later on.
Discipline is also required when it comes to your working environment. To establish your working hours, to organize yourself, etc.
Discipline is a must in the Forex business. We will elaborate further on this subject in the following lessons.