04. Determine Landmarks Via Price Action Archives

Trading Discipline For Consistent Success

 

This post was inspired by an email I received from a struggling trader yesterday. She was asking about what is missing, why she is struggling to find consistency.

Trading can become very emotional. Before the trade, there is fear of entering a position. During the trade there is the fear of risk and the natural drive to take profits after the trade clears break-even. There is also greed, sometimes a winning trade looks too good, so the trader does not want to exit.

How can a trader work towards consistent performance, towards profits? The answer is to be disciplined. Discipline is one of the most important skills to have.

It takes discipline to define a trading plan, and to stick to it. Discipline is required to stick you your best setups, to enter and exit when you should, and to control your risk exposure.

Discipline is key to long-term trading success, to profits, and key to survival. If a trader doesn’t follow rules, trade optimally, then the trader will eventually fail. The next time you make “bad” trades, resolve to be more deliberate, and more disciplined.

It’s not easy! Discipline does not come naturally, it takes repetition to for good habits. Every time you sit down to trade, consider whether you are being disciplined. Review your strategy, confirm that your risk is acceptable, that your trade setups meet your requirements, that you are not exiting or entering trades emotionally.

It takes constant work. No-one is perfect. Every time you fail to trade your plan, stop for a while, focus on discipline.

-Neal “FibMaster” Hughes.

Trade Entry, Trade Exit, Managing Positions

 

This is a trader question from the Fibonacci Trading Forum.

What part of my trading do I need to improve?
Analysis, Entry & Exit – I think that about covers every aspect of trading.

Neal responds:
Entry and exit are just the start, how about managing the trade, you know-adding to a losing position? LOL
-Neal

Avoid Micro-Managing Your Trades

 

This is a trader question from the Fibonacci Trading Forum.

Kosta says:
What do I struggle with the most?
In a micro view: when working out chart analysis, I am getting bogged down and paralyzed by too many details of Sup/Res on a lower time frames, and as I realize, it happens when you announce a chart “messy” :D and here comes a problem of ” sitting on my hands” when this situation mandates not trading.

Neal responds:

OK, you have identified two problems. Here are a couple of possible solutions…

The first is to keep a clear perspective of the trade setup. It may help to write down the context of the trade, the setup and the objectives (exit). That way, the lower time-frames can be seen in context, you can maintain a focus on the overall setup. Barring any major events, while the setup keeps you in the trade, the lower time-frame issues are not allowed to take you out.

The second issue of taking trades when you are not supposed to. Again, that is an issue of not following your plan. If you do not have a setup, or the markets are not trending etc, find something else to do! Maybe you need a hobby, or a girl-friend. I recommend the latter, it’s quite enjoyable, and will keep you plenty busy!

-Neal (FOREX Fibonacci Trading)