I have been lacking patience & discipline this month in my trading, so did lot of reading on psychology related stuff this weekend. Here is another paragraph from my article. It's always good idea to go back to basics and learn from your mistakes.
Patience & Discipline:"It's not the mathematical skill that's critical to winning, it's the patience & discipline of being able to stick to the system"
In my opinion, the number one reason a novice retail trader fail to become consistently profitable is due to lack of discipline to follow a trade plan. It often happens, when the market is not behaving according to their expectation, they become impatient and take trades out of frustration and deviate from their trade plan.
Perhaps this lack of patience & discipline arises from the fact that they get carried away with volatile price movements and when they see other traders posting their winning trades on trading forums, it hurts their ego and they think that they missed the boat and jump in the water without a thought, which only leads to failure.
Moreover, some traders also become impatient and over trade because they don't have sufficient capital to start with, as such they get itchy and often take mediocre trade setups when there is no proper trading signal according to their trade plan in fear that they might miss a move.
The most important thing a trader has to learn is when not to trade. It is not only when the markets are overly quiet or nasty whipsaws, but when they are having mental whipsaws. In other words, when they are taking irrational and illogical trades contrary to their trade plan. When they are trading to be right and win every trade to satisfy their ego, instead of trading to be profitable. If their mind is not in subjection to their reason, mistakes will be made. Sometimes, I fail to understand why traders find it so hard to do what is in their own best interest. You could read my complete article here: http://www.dukascopy.com/fxcomm/fx-article-contest/?Path-To-Success-Part&action=read&id=1165
Focus on learning how and why price moves, and you will make money.
Focus on how to make money, and you will go nowhere.
Focus on how to make money, and you will go nowhere.
Patience & Discipline:"It's not the mathematical skill that's critical to winning, it's the patience & discipline of being able to stick to the system"
In my opinion, the number one reason a novice retail trader fail to become consistently profitable is due to lack of discipline to follow a trade plan. It often happens, when the market is not behaving according to their expectation, they become impatient and take trades out of frustration and deviate from their trade plan.
Perhaps this lack of patience & discipline arises from the fact that they get carried away with volatile price movements and when they see other traders posting their winning trades on trading forums, it hurts their ego and they think that they missed the boat and jump in the water without a thought, which only leads to failure.
Moreover, some traders also become impatient and over trade because they don't have sufficient capital to start with, as such they get itchy and often take mediocre trade setups when there is no proper trading signal according to their trade plan in fear that they might miss a move.
The most important thing a trader has to learn is when not to trade. It is not only when the markets are overly quiet or nasty whipsaws, but when they are having mental whipsaws. In other words, when they are taking irrational and illogical trades contrary to their trade plan. When they are trading to be right and win every trade to satisfy their ego, instead of trading to be profitable. If their mind is not in subjection to their reason, mistakes will be made. Sometimes, I fail to understand why traders find it so hard to do what is in their own best interest. You could read my complete article here: http://www.dukascopy.com/fxcomm/fx-article-contest/?Path-To-Success-Part&action=read&id=1165
