Why discipline is essential to becoming a profitable trader
Forex trading obviously requires a high degree of discipline, most all traders know this, whether beginner or pro. However, knowing is different from doing, and while most all traders know they should be more disciplined, it often ends up being something they think they can put off until they make X amount of money. Trying to rationalize in your head not being disciplined is one of the biggest mistakes that almost all traders make at some point. I know how it works because I was once in your shoes. You probably have thought something like this recently, “I’ll start to become disciplined and manage my risk better once I get my account up to X amount of money…” Sound familiar? I’m willing to trade a lot of money that you thought that exact thing at some point or still think that. Almost every trader has.
The problem with thinking you can put off being a disciplined trader until XYZ happens is fairly obvious, yet most traders continue to do it. This is simply a mistake born out of greed, and greedy traders do not make money over the long-run. If there is one thing that will destroy your trading account faster than anything, it’s greed. A greedy trader trades too much and risks too much per trade, over-trading and over-leveraging are the two main reasons why most Forex traders lose money. In my opinion, trading almost naturally induces greedy behavior in traders due to the constant temptation of easily being able to make fast money by just clicking your mouse. Thus, for almost all people who trade the markets, a conscious plan to fight greed before it consumes you is necessary if you want to become a successful Forex trader.
Becoming a disciplined trader is about changing your trading habits
The traders who survive long enough in the markets to see themselves become consistently profitable are the ones who attain and sustain positive trading habits. Like anything else in life, habits define your reality and how far you go in any field. Habits are also reinforcing and they tend to become more ingrained into our personality and daily routine whether they are positive ones or negative ones.
Unfortunately, for most small retail Forex traders, developing the habits of a successful Forex trader is an uphill battle right out of the gate. Most traders come into the market with the dream of making quick money or with some idea of making enough money to quit their job right away. They also come into the market with relatively small trading accounts, essentially pitting their emotions and desires against the reality of the situation. The truth is, the harder you try to make a lot of money really fast, the more it will elude you. You may get lucky at first and hit a few big winners, but you are only reinforcing negative trading habits that will soon come back to bite you much harder than you might imagine.
So, the first step to becoming a disciplined trader is to simply accept the reality of what is possible given your account size, assuming you plan on implementing effective Forex money management. I know that you most likely want to make a lot of money really fast and quit your job, but if you have a $1,000 trading account, this is not a realistic option for you any time soon, even though many beginning traders seem to think they can parlay their tiny accounts into life-changing amounts overnight.
Don’t fall off the track once you start changing your habits
Another problem many traders run into is that they begin changing their trading habits and remain disciplined for a period of time only to fall off the track and back into their old trading habits. You really need to remain consciously aware of the importance of discipline everyday as you trade the markets. There really is no way to remain consistently profitable in the markets if you do not remain consistently disciplined, so please keep this in mind as you begin your journey to become and stay a disciplined trader.
Once you start changing your trading habits it should become easier for you to maintain them and thus staying disciplined will not seem like a chore to you anymore. It’s similar to exercising regularly; in the beginning it can be uncomfortable and difficult, but as time goes on it will become second-nature as the positive effects of exercising reinforce the necessity of it as well as your desire to do it, and it will eventually be something you look forward to and couldn’t imagine NOT doing. Similarly, once you develop positive Forex trading habits they will reinforce themselves as you start to see yourself losing less money and making more consistent returns over time, these positive trading habits will then start to become second-nature to you and you will wonder why you ever traded so undisciplined before.