Discipline

Forex Discipline

Discipline is a vital asset in the process of trading, and it is needed in three areas:

1. Finding a Suitable Method.

Methods do not float from the sky and land on your lap. They require hard work and vigorous investigation. Consequently, discipline is required to push the process forward. There will literally be hundreds of various investigations in many methods and hundreds of failures, but there is nothing more rewarding in the end when suddenly you and the graph become one. A person also needs discipline in deciding what method works. Many methods appear to work, but when you actually trade with it, it fails and it takes a disciplined person to frankly admit that it doesn´t work and go back to the drawing board for the nth time. 

2. Emotional Discipline

During trading, the emotions suddenly appear to declare war on you. There are many similarities between drink driving and trading. In the British system, a person learns a lot of rules about how to drive and unless they become a disciplined, competant driver, they shall not pass their driving exams. However, it  doesn´t matter how skilled you are on the road, after a couple of pints of beer your driving becomes erratic. This is the life of a currency trader. A drunk driver feels confident at the wheel, and a currency trader also can have a sense of confidence and yet not realise that this is the adrenaline pumping. The potential for earning money can blur your vision and make you trade erratically. Consequently, it takes practise to be able to transcend the inner struggle and formulate a discipline to conform to a trading method that works.

3. Discipline to Follow a Method

While emotions urge you to leave a set trading method, there are other enemies too. The idea of a trading method is that it warns of a coming big move in price. It preempts that move and as a consequence the trader is looking at a graph that looks pretty plain and unappetizing. As a consequence, even though the signals are in place to enter the market, your entire body is telling you that you must be clinically insane! The temptation is to say to yourself, ´I´ll just wait a while and see what happens´. As a result, you do not follow your method, you rush in late and what follows can get messy. In trading you are a robot, a servant of the method. You need to be disciplined and follow it to the letter.