Traders should have a lot of exceptional qualities, but the main one is self-discipline. Even the most qualified financial analysts at IronTrade may lose their gains if they cannot control their habits and risk more than is necessary.
Here, at IronTrade, we constantly think about how to help our traders to grow themselves. We have gathered some simple rules that may help to transform your trading strategies into a more attentive and thoughtful trading style. Here they are:
1. Change your focus
If you always eat the prize with your eyes, you might be getting too caught up in the idea of earning. Here you can ask: “How come? Profits are the goal of any trader!”. And you will be correct. BUT, if you constantly focus only on one thing, e.g., your profits, it will never be helpful.
When you are concentrated only on income, it will be hard for you to control your emotions.
When you are obsessed with the idea of getting profits, you may skip all other steps that are necessary to get them. You will get reckless while trying to recover your losses and do not pay enough attention to analysis. If it is all about you, think about how you usually trade. Do you plan your strategy beforehand? Do you make checklists? Do you review all the information before making each trade? If yes, then you succumb to emotions.
You might want to change your focus from making money to “learn and examine new strategies”. It will help you understand what is more relevant for you now and how to improve your approach in a long-term perspective, rather than getting fast, trivial profits.
2. Make your money management a habit.
Risk management is a sequence of actions that experienced IronTrade traders do before and after each trade. These actions are necessary to control your trading balance and the level of risk that trades might have. These actions also help to prevent significant losses.
While it may be obvious that reducing risk is important, many traders do only pleasant and convenient things, disregarding what is actually necessary.
Certain money management techniques indeed seem not intuitive. For example, setting limits to their take profits level. Why would traders reduct their own incomes short? The purpose of this is to ensure that the trader understands the worst scenario and is prepared for it, so he may lose only some part of his investments, not the whole amount, in case something goes wrong.
Transforming risk management into a new habit is essential because it encourages traders to control their behavior even in stressful situations. Money management requires studying the market and keeping a log of trades, where all the results, instruments, and assets were specified.
3. Be psychologically ready to accept losses.
When you close the trade, it is not the end. Your self-discipline is still required to control your emotions in case of losses. Do it calmly and analyze why it happened, what went wrong and how you can change your trading style to avoid such situations in the future.
We know that it is hard to accept losses, but if you change your focus from the outcome to the process of learning, then you may start understanding your mistakes and do better next time. Accepting losses will be easier with time, especially if you study hard.
4. What is the main secret to staying disciplined?
Well…as usual, your actions are the main factor that necessarily drives your emotions. Try to change your surroundings and how you trade first. Get a piece of paper and write down your trading plan. Map out the strategy and money management techniques you will be using. Finally, specify your previous losses and how you can avoid them in the future. Put these things in front of your computer and trading terminal to not forget them.
Take them in your hands while trading and reread. It will help you make the most out of planning and managing your money in a much more attentive manner.
