Creating a winner’s edge in trading psychology is a must before substantial growth in trading performance could be expected.
Many factors contribute in generating such an edge. However, the two most important topics could easily be discipline and patience.
Without a doubt discipline and patience are needed within all facets of trading in order for a trader to thrive and create the winner’s edge in trading psychology.
STARTING IN FOREX
Starting a business and career in Forex is actually quite simple. With the opportunity to open up accounts at brokers with a minimum balance sometimes as low as $50, the business does not have many hurdles to overcome before a trader can “open shop”.
The easiest mistake to do when starting your trading career is assuming that you can succeed in the realm of Forex without a proper business plan and trading plan.
For many the temptation to immediately capitalize on the opportunity the market provides is just too great. The early enthusiasm gets slammed down at one point or another when the luck runs out and the lack of preparedness becomes apparent. Any patience that was still present just vanished like snow before a blazing sun.
Without the rules and guidelines of a trading plan, the trader has no chance of creating a consistent and sustainable edge in the market. Any potential profit could be just random luck.
In other words: failing to plan is equal to planning to fail…
Most people are willing to win, but not many are prepared to prepare themselves to win.
Starting with the right mindset is crucial as it sets traders up for the correct path of growth and not for a false hope of immediate ever-lasting Forex success.
The same “iron” discipline is not only needed on a big macro level, but also when traders progress with their trading career.
It requires a lot of discipline to diligently and consistently work and improve on your business and trading plan. This path does provide perspective because the trader will invest sufficient time into research, charting, demo trading, paper trading, live trading, risk management, money management, and strategies.
It also requires a good dose of patience. The profits will most likely not be rolling in from day one. The process of creating a business and trading plan simply requires sufficient time. In fact, for most traders it takes a couple of years before they become consistently profitable. This holds true not only in the world of Forex, but also in the broader business world. Many startup companies struggle in the first few years. It is vital that all of your stake holders are aware of this time plan and investment because even if you do not run out of patience, your environment certainly could.
TRADING AND MANAGEMENT
Discipline and patience are also key characteristics in success on the micro level: the time spent actually trading and trade management. So far we have discussed how discipline and patience is a pre-requisite before entering the realm of Forex and when creating a business and trading plan. The presence of a business and trading plan has no importance and actual impact if those documents are not actually used during the trading itself. Letting them collect dust on the book shelf will not be effective.
Discipline and patience are also musts for the implementation of the trading plan and trade management plan. When traders use discipline and patience with their trading plan and trade management plan, they are then able to measure the effectiveness of their plan. Without it, the trader does not know whether the implementation of the plan or the plan itself is causing the losses.
IMPROVING DISCIPLINE AND PATIENCE
The level of discipline and patience traders have at the moment they start and progress in their trading career certainly varies from trader to trader. Despite the variations among us, all traders equally share the opportunity to improve on their discipline and patience skills.
Discipline can be increased by creating a routine. Remember that you are what you habitually do. If someone is watching TV and playing video games 20 hours a day, 5 days a week, then their chances of succeeding in the Forex market are – logically – non-existent. When tackling anything in life, the best and fastest route to success is when a consistent approach is applied. Without the consistency, traders will swing back and forth between periods of success and losses. The best method is to do daily activities that are connecting to improving your Forex trading every day, day-in and day-out instead of investing a ton of time ad hoc for one week and then not looking at it for 3 months.
The next golden rule is to tackle goals step by step. Once you have a routine in play and have developed the discipline to follow it, you can start working on your goals diligently. The only thing stopping you now is lack of patience. Creating a step-by-step plan allows you to break down the goals into manageable pieces and also allows you to prioritize the importance of tasks. In the end, it provides you with a method of reaching the big goal. The step by step approach is important for remaining patient: the fact that targets have been hit at the end of the day, week or month boosts excitement and motivation and keeps the mind on the right track.
The best method to organize the step by the step approach is by writing down (on paper, pc, tablet) the tasks that need to be completed by when and how important they are. The task list provides perfect clarity. Providing yourself an honest grade for your own performance at the end of the day is one way of keeping your mind focused on the duties at hand instead of being distracted.
An important part of the step by step approach is the time element. It is important to keep track of how effective you are in tasks. That way you can consistently try to improve your speed and quality of your tasks. Actually measuring the length of how long it takes to complete something and then setting that as a standard for the future is a very effective method. This of course does take discipline, as mentioned above.
How do you achieve discipline and patience?
Are there tips that you use which you could share with us in the comments?
Thanks for reading and sharing this article, and Happy Trading!
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