Discipline is the one character trait is considered by most successful traders to be the most important key to trading success but most novices think its an easy trait to just acquire without effort but its not.
Here we will look at why, it's so important to trade your trading strategy with discipline - due to the nature of trading and the reason our biological nature can make it a hard trait to acquire. The good news is anyone can make a commitment and learn to become a disciplined trader, if they want to. Lets first look at the difference between the currency markets and many other areas of our lives.
Operating in Structured and non Structured Environments
For most people there everyday life is structured by rules. We stop at traffic light, know not to throw litter, not to drive without a licence and within the speed limit and follow many other rules. Most people go to work and know for X amount of effort in terms of the job they are in they will earn a set amount of money. Most peoples lives are structured and they obey a societies rules. If there were no rules in society, it would be total anarchy and lead to disorder, an increased death rate and lower standards of living.
Now let's contrast this with the Forex markets.
The Forex markets have no rules and no structure. Everyone is on their own, fighting for survival, by trying not to lose money and make it. The odds are - 90% of traders lose money and only 10% win so you must fight to get in the winning 10%. When you do this you have no friends, no one to help you, its a battle for survival which you must rely on your trading skills and discipline to prosper.
If you want to make money from it you have to create a set of rules yourself in order to survive and make money which is the only reason to Trade Forex. You don't get paid for work or your effort, when building a trading system to generate trading signals, you are rewarded only for the money they make. If your strategy has a definable edge which allows it to make money this means - applying your trading strategy rules, with confidence and discipline.
The Ask an Expert Herd Who Lose
There are huge number of Forex traders who think asking an expert is a great idea in Forex trading because that's what their used to doing in their normal lives but it ends in disaster. If your roof is damaged on your house, you can call an expert and he will fix it for you.
As a general rule the expert will get you the result you want. When trading foreign exchange this doesn't apply -you are guaranteed nothing and it a market where you can't guarantee a result. This doesn't stop traders buying guru systems, FX robots and the so called Expert Advisor systems – what happens? They all lose money. They are not from experienced traders normally just marketing companies and the result is the trader who follows them, join the losing herd.
The Forex Market Illusion and Reality
Many traders see the market as they want to see it and not how it really is. They see the potential but don't see what really needs to be done in order to emerge a winner. They believe that what will work in many other areas of their life can be applied to Forex trading and here are some of the most common errors they make.
They believe they have a high IQ and should win but this is no help at all, as you don't need a complex system to win.
They are so used to rules so they can't face taking responsibility for their actions and consult a so called expert and as we have already seen, this ends in disaster.
They can't accept that to win at trading you have to look foolish and have as many or more losing trades as winners.
Other traders do make the effort to learn currency trading and get an education but cannot control their emotions. They let losing trading signals get to big because they don't want to be wrong and cut winners to quickly either to cover losses or because they don't have the confidence to hold them. They also get frustrated with one strategy not working so either over ride the rules of the strategy or switch, to another trading method in pursuit of the elusive strategy which beats the market.
Adopting a Disciplined Mindset
You can have trading systems and strategies which are based on logical assumptions and can win but you have to make the system profitable through your mindset which is to apply it and execute your trades with discipline. You need to apply the trading signals of your trading strategy with discipline, to make profits over the longer term and enjoy success and if you don't you will lose.
Discipline is a trading skill which is based on an education which has shown you the reality of trading currencies, confidence in the method you are using in the market and its trading edge, to give you profits over the longer term. You accept the challenge of trading and know what you have to do to win. Can anyone really get a disciplined mindset?
The answer of course is yes but its a choice you need to make to win. For me its an easy one but people by their very nature want quick results or are not prepared to do what they need to achieve their aim. A good contrast is with going on a diet. Dieting is easy – eat the right way and you lose weight overtime but how many people complete diets successfully – about 10% which is around the same percentage of people who win at currency trading.
Forex Trading Success
Forex trading success is dependant on disciplined application of trading signals which conform to a set of rules. To achieve success you must follow your rules and place your signals. The fact is anyone can learn to trade currencies but its a market which gives most traders a mental challenge which they never overcome or don't want to. In life there are people, who will take responsibility for their financial destiny, have a burning desire to succeed, work at their profession and have the confidence and discipline, to stick to a plan and its these people, who make money be it in business or trading Forex markets.
My own view is that most people, are not motivated and disciplined in life and that's why the vast majority of people, don't make much money. There are a minority of people in everyday life, who are winners and this is also present in the Forex markets. If you have understood this article, you will see why so many people always lose in the Forex markets and how you learn to win. Winning is an attitude and anyone can adopt the correct mindset to win if they want to, it really is that simple.