Discipline helps the trader over

Discipline helps the trader overcome two types of emotions encountered when trading: Fear and Greed.

Discipline

ForexThinker.com

Manage risk. Trade better.

Simply, discipline or self discipline is the effort and determination of a trader to adhere to:
1. A trading system
2. Specific money management rules he/she set for trading that system.

First, adhering to each and every buy, sell, and hold forex trading signal generated by a thoroughly tested trading system eliminates fear of establishing, maintaining or exiting a position in the forex market. Further, abiding by a forex trading signal does away with greed that often causes foreign exchange trading pitfalls resulting from getting into a position early because of impulse to by or sell, staying in a position too long hoping to accumulate more profits and eventually exiting it late, sometimes turning a good trade into a losing one.

Greed. A viable trading system, money management, and discipline eliminate the pitfalls of greed in trading.

Second, adhering to preset money management rules of a thoroughly tested trading system eliminates the greed to make a larger profit by putting too much cash (overtrading) in a single position that might become a losing position. Adherence to money management rules also eliminates fear that can result in investing less money into a trade that might eventually be profitable.

Self discipline is an an ingredient of successful foreign exchange trading. It is a valuable quality that can be developed and learned through currency demo trading and actual trading.

Broker working in front of computers on the exchange floor.

-------------------------
ForexThinker.com currency trading formula:

money management + viable trading system+ self discipline=
Successful Currency Trading

-------------------------

                     Q: What can
                      be a costly
                      mistake for
                      a trader?

Ans: Placing an incorrect
          order.

Home