New to Forex: Need Advice

Discipline in trading is often referred to as the real holy grail of trading, however what many fail to realize is that in order to be disciplined, you must have something to be disciplined about. Many times when one is starting out, they have one goal in mind and that is to be profitable. While this is generally the goal of any trader, it hardly explains or details how discipline is to be a part of the goal. To be profitable, one must first have a method and an edge, and this is no easy task, especially in forex. Only then, when a method is devised, can one truly use the power of discipline to elevate ones profits.

Discipline is defined in many ways throughout the evolution of a trader. At first, one needs to realize that his main goal is to find a method that over time will yield a sizeble profit worthy of the risk being taken. As such, you need to set an amount of money aside for research and development, and use it exclusively for that. To trade a system in order to see its profitability by trail and error is to be undisciplined in your research goals. This may mean setting money aside so that you can spend the necessary time researching without any income whatsoever. This may mean a certain budget for seminars. This may mean travel expenses to meet traders that you know to be successful and are willing to help. The point is, if you are allocating 20K or $2 towards research, then be disciplined to get every last ounce of value that you can out of that 20K or $2 specifically for research, and not waste it on trial and error trading.

Once you have done this initial research, it is important to trade your system in small amounts exactly as it is defined. Many times, traders, including myself tend to look for filters immediately that eliminate drawdown and the psychological burden of losing streaks. It is the discipline that you have given in your research efforts that should give you the confidence and the discipline to avoid doing that now. If you are capable of sticking to your guns under all circumstances and trade your method exactly as it is written, you have now proven to yourself that you will have the discipline to execute efficiently any profitable system that you come in contact with. This period is more focused on you than on outcome. The first phase you have used discipline to see if you can research a worthy method. This phase you are using discipline to prove if you are cut out to be a trader or not. Youshould continue a journal and review it every so often - are you making the same mistakes - are there factors with your life personally that may influence you to make more mistakes, and if so do you stop trading when those factors appear. And yes, I mean that fully - if your life is unmanageable very often in many aspects, you cannot trade for a living. If you are depressed, manic, unhealthy, etc you should not trade and part of your discipline in this phase will be to make sure to allocate the necessary time towards other things in your life so that when you are trading, you will be 100% focused on trading.

Alas, when you know that you have a proven method, the discipline to execute efficiently and to stay within yourself, you will be ready to allocate a more sizeable amount of money towards trading. At this point, discipline becomes second nature as any other way would be just plain gambling. You are excited not because you are getting into a trade, but because you know that with patience and disipline your method will take care of the rest. This is the importance of having a reliable method. Without it discipline is just a word that you will not be able to define and employ in your trading. It all sounds really simple and it is, however I am shocked at how many people truly know this yet are incapable of incorporating it into their trading. If you focus on wanting to make money, you will always be wanting to make money. If you focus on sound trading you will eventually be trading soundly.

I think alot of people are offended to realize that they are not cut out for this and don't want to accept it. If anyone were to apply for a fireman position and fail the physical, they would move on or dedicate more resources to prepare in a structured way to pass the exam. If they were to consistently fail they would probably assume that they just aren't cut out for it and move on - In trading, if you can't get past that initial phase, don't go on the rest of your life dropping every last dime you save ino the pool. Its like me failing the physical exam and running into a five alarm fire in my civilian clothes with the intention of saving everyone in there. Sure it is heroic, but it will probably end up getting me killed.

Trading is very simple but it is not easy. You need to have a plan- and not only a plan, but an excellent plan, and then you need to execute. To be disciplined in trading a random system that you know nothing about is to not be disciplined. You need to know your motivations and your limitations. Be objective with yourself and ask yourself if I had 10 million dollars, would I invest it with me. Dont trade until you can answer yes to this.

Wow, couldn't have asked for better advice. Many of the mistakes you mentioned, I have already made within the first couple months. I really appreciate your help and look forward to learning from you more. If you have anymore input or feedback please let me know! It would be greatly appreciated!

First of all, this doesn’t apply to everyone of course. However, if you’re a novice trader who is just starting out, it would be wise to not expect to make a lot of money or an ‘income’ from trading. These early years are your training period, your pursuit of education as well as screen-time and the ‘school of hard knocks’ will probably result in you breaking even or even in a small loss if you are trading a small account.

You are absolutely right faisal; 1st year of trading is not for money earning; it’s the period of learning and improving own trading skill! Even, I needed 1.5 years to grow my trading skill on technical and fundamental analysis!

Yes, it is. But alas! I took my trading first year for earning profit within a short time. it was my emotions and lack of experience about Fx reality. I did grand losses . after that I had to focused on learning to acquire good trading knowledge .

Learning is not enough for the beginner trader to avoid loss, you have to keep practice besides learning. Otherwise learning will not works at all. micro account or demo we can take as a part of practicing.

We can learn from our running trading, it’s a better source than others. But we have to make sure not to do the same mistake that we did before. Our learning will work greatly if we can remove emotions when trading practically. Removing emotions is a part of successful trading and after all it is more appropriate to cut out the revenge trading attitude after having a loss.

I don’t think successful trade always can trade devoid of emotions ,
because they are common human being as like loser traders.

Only learning the trading and its concepts is not enough to be the good trader, you need to develop skills for trading so that you can face the risk of a market with proper strategy.

We can develop our trading skill by practicing more with great patience. But we practically always ignore the practice and willing to earn profit very rapidly without passing a long time.

For that we need such person who can have skills to be patience during the market movement and trade without fear. None human can be perfect without any struggle of knowledge.

Good trading knowledge and a powerful analyzing trading strategy is more appropriate to make sure profit consistency in Forex trading. But to ensure good trading knowledge is a long time process , that’s why we lost motivation to keep continue , and having a powerful strategy always can bring profit with certainly if we know the real money managing plan.

Sounds like a position sizing issue to me, or perhaps you are not using a stop loss?