Most people make trading more complicated than it needs to be. Whenever it is not easy to succeed in trading, it is very easy if you boil it for its main components. If you do this, there are really only four pieces of the 'puzzle' that you need to pay attention to. If you are spending time and energy focusing on something other than these four pieces, then you are just completing the trading process and moving forward on the road to success.
1. Trade Entry Strategy
Trading entry strategy is the most crucial part of the trade. This is the time when all of your trading capital is at risk. Many traders do not even know what their strategy is or they can not specify it easily, as they are trying to combine different messy methods together. This is wrong and perplexing and the first reason is that you are not making money in the market. So at first, you must have to learn a simple trade entry strategy that will allow you to find high probability entries into the market. whatever strategy you will learn, the most important thing is to commit to one strategy and master it to the point of having no issue about when you should enter the market and when you shouldn’t.
Forex trading is an art that needs a certain level of discipline. Not only do you have to stick to a set of trading rules, but you also have to be able to keep your eye on the prize at all times. You will need to master discipline in order to stick to your entry strategy, money management strategy, and exit strategy. Patience and discipline are basically the same things in regards to trading; you have to be patient to wait for the best trades and you need the discipline to be patient.
There are some essential steps one has to take to become a disciplined forex trader.
1. Control Your Emotions
2. Acquire Good Trading Habits
3. Be Realistic
4. Keep a Trading Ledger
5. Keep To a Trading Timetable
3. Money Management
Forex money management is how you conduct your money when you trade. Money management refers to a set of rules that help you maximize your profits, minimize your losses and grow your trading account. While it’s pretty easy to understand the benefits of these techniques, it happens that beginners to Forex trading tend to neglect even basic money management rules and end up blowing their accounts.
The first step is to pre-define your risk per trade. You need to be fully confident in what you’re risking per trade. You have to simply not care about the money you’re risking on any one trade. This is crucial. You also need to be sure you have barely risk capital in your account so that you can let your trading strategy play out over a series of trades. Otherwise, you won’t give your trading strategy a real chance to work in your favor.
4. Trade Exit Strategy
Finally, as important as you need an entry strategy, you need an exit strategy also. I have found that very few traders have a trade exit strategy than have entry strategies. Ironically, having a predefined exit strategy or plan maybe even more important than an entry strategy. It is probably the most challenging and frustrating part of trading and an area that tends to be overlooked in much Forex education.
When traders do not have an exit strategy before entering a trade, they usually exit with very little profit, otherwise, they make no profit on a trade that at one point is 2 times their risk Was more. It is very easy to maintain discipline if you have a plan of how and when you will exit a trade, as opposed to just ‘winging it’ as most traders do.