When you hear about trading, whether in forex or other instruments, then, most probably, you think of highly technical skills in analysis, reading charts, and predicting the trends. Indeed, these skills do play a part in your success as a trader. However, the foundation of your career in trading is made of two humble but eternal virtues that can make a professional out of any layperson. They are discipline and patience. Believe it or not, but the qualities that teachers at school tried to instill in you (with varied success, we bet) are really necessary if you plan to make a living by forex trading.
Why discipline and why patience?
Because these two qualities underlay the ability to plan and stick to this plan. And this consistency, in its turn, makes a really good trader.
Discipline stands for regularity of trading tools application and evaluation of the situation on the market.
Patience stands for the ability to execute your plan amidst FOMO, panic, or waves of uncertainty that rock the markets now and then.
Planning and use of trading tools
Discipline is everywhere if you look at the need to acquire knowledge and apply it in trading. Technical analysis, fundamental analysis, various charts and diagrams demonstrating averages and levels – you need to master these tools and skills well before you start risking your money. Learning daily and learning from your mistakes and victories is discipline. Trading along the lines ‘I feel it is a right step’ is not. Guess where losses are inevitable?
Knowledge is one thing. Operating based on this knowledge is another one. Analyze markets every time you plan to open or close a position. Do not operate on assumptions or the hype. Know the exact time, conditions, and goals of entering the market and exiting it. It is discipline plus patience at their best.
Fear of missing out (FOMO) is the emotion that left many a trader penniless and depressed, although the prospects looked good initially. Yet the point is, in FOMO, only those win who create the hype triggers. These people are backstage, always invisible, generating and spreading the big news or scandalous rumors that create the hype.
Traders, especially newbies and those trading on a small to middle scale, usually lose in the end because of FOMO. This is the goal of hype – to scalp the majority. So do not participate in it. Stick to your plan, because sooner or later the emotions will fade away and the market will settle in the same position it was before the hype.
Patience and discipline are your best friends in resisting this emotional urge.
Knowing your strong sides
Discipline in analyzing your trading patterns and the trading results and recording them day by day helps you see how you perform. If you see that your plan puts you into trouble, you can change that plan. If it does you good, you can safely continue relying on it. But in any case, you need to follow patiently the result of your work. Yes, patience, you heard it right.
At what time to start trade, what limits to set, what risks to take, and when to refrain from trading – the combination of your personal winning factors is called the edge. And discipline is your path to finding this edge.
Acknowledging the risk and minimizing it
Yes, risks. Trading is a risk, and it is the inevitable part of the deal. However, implementing steps against the excessive risks and not engaging in obviously risky steps is the way to minimize the loss. Stop-loss, trade-free days (forex detox), and knowing how much money to risk will do the trick if you apply them well. And this is where the plan, patience, and discipline will be your faithful guards against the FOMO and temptations.
So, be patient, measure your steps, and have a good trade!