Trading Psychology: Discipline is your Weapon Against Impulsion
When you trade forex, it’s essential to do so in the most disciplined and organised manner possible. Without discipline, you will quickly find yourself panicking on the trading platform, making impulsive trading decisions that are based on fear, hope, stress, anticipation or any combination of these emotions.
However, trading with discipline takes practice, patience and persistence. The forex market moves at a fast and largely unpredictable rate while there is plenty of activity taking place that keeps even the most experienced traders on their toes. It can be easy to make impulsive, risky decisions that haven’t been planned beforehand, but these decisions almost always result in losses because the trader hasn’t studied the market or planned their moves.
To contrast, the most organised and disciplined traders are the ones who are able to make a career out of forex trading. These traders rarely deviate from their trading plan and are as objective and emotionless as possible, from the moment they enter the platform to the moment they finish a trade. For this reason, discipline is one of your most powerful weapons against impulsion.
How to Avoid Impulsive Risk-Taking
To avoid taking risks on the trading platform it is critical that you:
Study the markets carefully and plan every move beforehand
Focus on creating a proper trading strategy that has been tested repeatedly on a demo account
Develop a trading style that matches your philosophy and personality
Learn how to control any emotional impulses and desires
Never attempt to ‘fight’ or ‘beat’ the market or believe there is some magic formula that gives you a shortcut to success
Are completely emotionless whilst trading
Accept any losses and quickly move on from them
Arming yourself with the Right Tools
Accomplished traders never stop learning; they continually educate themselves about all aspects of forex trading and spend time bettering themselves as individuals and as traders. These individuals also spend ample time on a demo trading account, practising any new strategies or ideas until they are confident to execute them live in a strictly disciplined manner.
Successful traders also take responsibility for all actions and never blame the market. They take a methodical, systematic trading approach that is constantly tweaked and refined to keep up with market changes. They also build a trading plan, set trading rules, perform thorough research and gain plenty of experience to overcome the desire to make impulsive decisions.