The world of forex is full of excitement; it gives traders the possibility of controlling huge amounts of money without the need to invest a lot of their own capital. The old industry saying of ‘buy low, sell high’ – when done right – can be extremely rewarding.
During the early part of their trading careers, beginners will often proclaim that they’re on a quest to beat the market, take full control of an instrument and go for the big win. They will be awake for days on end, looking for the ‘Holy Grail’ of trades and, very possibly, dig deep into a leverage that is way over their heads and level of experience. These poor habits are usually set off by the excitement that follows one profitable trade generates and judgement then flies out the window. Beginners also tend to make mistakes on the markets when they let their emotions get the better of them – usually after losing a few trades in a row. They fall into the rookie trap of risking more than they should, to try and make up for what they’ve lost.
There are many skills that a trader must master to tackle the markets and discipline is one of them. Those who fail to grasp the significance of discipline will more than likely end up trading in fear, with greed as their guide. This is a lethal combination. Fear often paralyses traders, preventing them from locking in orders, or entering the market altogether. Greed is never a good vice in trading because it can result in a trader over extending himself.
Proper risk management and good discipline in tandem, are the captains of every efficient trading strategy. Professional traders are well aware of this. They also understand the importance of having a personalised trading strategy; one that is based on their lifestyle, profile, history, and level of knowledge and experience. Most essential of all however, is sticking to the strategy and risk management measures no matter what. They can be the greatest techniques and strategies on paper, but if you don’t have the discipline to follow them, the results will in all likelihood, be disappointing.
For a trader to make that transition from novice to professional, it is imperative for him or her to master the art of discipline with regards to mapping out a strategy and sticking by it. This is essential for obtaining the momentum they need to possibly achieve real success; they need to actualise the strategy irrespective of their current position (i.e. profit or loss). Locking in a profit at a predetermined level, for example, is equally as important as limiting a loss.
Every trader, novice and veteran, shares the same goal – but it’s the way they achieve this goal that sets them apart. Professional traders practice discipline, are loyal to their trading strategies and have full control over their emotions (both positive and negative). Beginners, on the other hand, will more often than not get burned a few times before they realise the advantages of discipline. The sooner they learn how to handle these essential aspects of the profession, the sooner they could start reaping the rewards.