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Develop Trading Discipline

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Develop Trading Discipline

Postby johnsmith00710 » Sun Jun 30, 2013 6:27 am

Develop trading discipline in yourself if you want to become a successful trader in the long run. In a trading session, if you come to a point in your market analysis when you have no confidence on the accurate direction of the market forecast. Always remember, a lost opportunity is better than lost capital. Choose not to trade.

You should wait for the market conditions to become clearer. You should increase the probability of success by trading when the trade setups are strong. This is far more important in forex than in stock markets as the forex markets move a lot.

You should understand that high leverage gives you the opportunity to make a lot more money much faster. But in case you go wrong, you can get your account wiped out. When you don't see an opportunity clearly, try to sit on the sidelines. Wait for the market conditions to become clearer. Learn to be a patient trader. Let the market come to you.

You should understand that leverage is a wonderful money making tool. It is the key to making money in the currency markets as no other markets allow high leverage that this market allows. A leverage of 100:1 means that for a $1000 deposit, you can trade $100,000. This huge amount of leverage gives you the opportunity to make the kind of returns that you want.

But using high leverage also has the potential of making you lose some or all of your capital if you trade foolishly. Take the example of credit cards. The bank let's you borrow huge sums of money using your credit card on the promise that you will pay it back.

But in case you abuse your credit card. It can lead you into heavy debt. It can even result in bankruptcy. You should manage leverage in forex trading like you manage your credit card. You have $10,000. It does not mean that you should trade 10 lots and use all your $10,000 capital. Using all your capital in one trading session would be foolish on your part and highly risky.

A very conservative yet very effective method would be to never leverage more than 20% of your account. Thus, you should only trade two lots with a $10,000 capital. Using good money management and discipline, you grow your account successfully in a short period of time.

Don't forget the power of compounding. The compounding factor applied to your capital can make it grow fast. Many people want to get rich quick. They take unnecessary risks while trading, thinking that a few big wins will make them rich. They don't focus on proper trading principles. You need to develop the discipline in yourself to follow simple money management rules.

If you are trading a mini account, start by trading one position of one tenth of a lot. You will not make much money in the beginning as the position size is only one tenth of a normal lot. But the percentage of returns will compound over time and let you trade a much larger sum of money with the passage of time.

As a forex trader, you should make realistic goals. Goals that can be achieved over time! You should not use your life savings. You should never borrow money to trade. You should not use money that you would use to pay monthly utility bills. You should always trade with the money that you can afford to lose! Never ever trade with money that you cannot afford to lose! It is foolish. You should not think like a gambler. Trading is business. It is not gambling.

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http://www.forexprofitmagic.com/free-fx-system-abs
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Re: Develop Trading Discipline

Postby Shawnmichal » Thu Jul 11, 2013 7:13 am

Thank you for sharing this valuable and very informative thread. i find this information very useful.
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Re: Develop Trading Discipline

Postby uncle gober » Thu Jul 25, 2013 1:46 pm

It's good post. And that's true that we should be discipline when trading because it's key to success. The use of leverage is to be aware, adjust our trading strategy. I use 1:500 for scalping, and most importantly we feel comfortable when using the leverage.
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Re: Develop Trading Discipline

Postby Sha123456 » Fri Oct 31, 2014 10:57 am

"Michael would go for 40 or 50 points one night, and the next morning he was right back at it in practice. He just couldn't take a day off. His mental toughness was unbelievable, but the reason was that he was so physically ready every day. He used to have a saying, 'I practice so hard because that makes the games easy for me.'"
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Re: Develop Trading Discipline

Postby orni308 » Mon Nov 10, 2014 2:32 pm

Yes its one of the most important aspect of a forex trader, to remain in discipline, a trader should have some rules according to his trading capabilities and should obey them.
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Re: Develop Trading Discipline

Postby Husam » Tue Nov 11, 2014 6:48 am

Thanks for your this post. Because, self-discipline is another very important point for Forex trader to be a professional Forex trader. By the way, my trading broker ‘GCI’ always provides me highly protected trading environment that helps me very much to make a professional trading plan. Thus, I maintain my trading discipline. Actually, ‘GCI’ is a regulated trading broker which has more than 12 years market experience.
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Re: Develop Trading Discipline

Postby gahaman » Thu Nov 13, 2014 8:51 pm

good read and thanks for sharing, decipline is one thing a lot traders lack now a days. thats the reason a lot of traders fail in the first place, its lack of discipline
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Re: Develop Trading Discipline

Postby Jura » Mon Nov 24, 2014 5:45 pm

forex leverage does not change the value of the lot, and you have a choice to trade different lot sizes, it is not necessarily more risky to have more leverage, as it would be with futures, where you cannot change the lot size. Higher leverage just confers the ability to trade larger lots (or more lots) with less capital. If you had only $500, for instance, you can open up a micro account with 400:1 leverage, so that you can control up to 20 micro lots with only $2.5 margin for each. Or, you can control 1 micro lot with just a $2.5 margin. In between your minimum and maximum use of leverage and lot sizing is a vast range of flexibility.
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Re: Develop Trading Discipline

Postby Sebastian Abney » Mon Dec 01, 2014 1:25 am

Discipline in life plays a major role, it is not restricted to just business and the moment we learn and develop it, the results will appear for all to see. I personally trade with strict money management plans and for able to stick to it I need to be discipline and determined, it is something that is very easy yet I am able to manage it.

I also would like to share my success credit that I had so far to my broker OctaFX, it is one of the best company to trade with at present. I have invested little amount yet I was able to make great profits thanks to their 50% bonus even with my little investment of just 15 USD.
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Re: Develop Trading Discipline

Postby orni308 » Tue Dec 02, 2014 4:19 pm

Jura wrote:forex leverage does not change the value of the lot, and you have a choice to trade different lot sizes, it is not necessarily more risky to have more leverage, as it would be with futures, where you cannot change the lot size. Higher leverage just confers the ability to trade larger lots (or more lots) with less capital. If you had only $500, for instance, you can open up a micro account with 400:1 leverage, so that you can control up to 20 micro lots with only $2.5 margin for each. Or, you can control 1 micro lot with just a $2.5 margin. In between your minimum and maximum use of leverage and lot sizing is a vast range of flexibility.


Leverages seems to be good, but high leverages are risky and it should be used by trader with good experience or if you are very much sure about a trade.
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