How Forex Trading Discipline Leads to Better Trades

Trading discipline involves making yourself follow your own trading rules. Self discipline enables a trader to trade a system consistently over time like they planned to with the right position sizing, stop losses, and trailing stops.

The lack of discipline to take a trade when you have a signal can be devastating as you miss the good trades. Fear can be holding you back from taking your entries. The causes can be that you don‘t have faith in your signals because you have not backtested them enough, don’t understand the edge, or you are simply trading too big. In trading you will have losses and you have to accept it if you want to trade. If you felt too much stress when taking a trade decrease your position size until you are comfortable enough to enter.

Fear of missing out can cause a trader to lose discipline and enter a trade too late leaving them with a bad risk/reward ratio. Knowing that no one trade will matter much in your next 100 trades will help lower the desire to chase. There will be other trades, wait for them.

Entering too early into a trade can be a loss of the discipline of patience. Front running a signal to try to get a better price is dangerous because you are buying randomly and with no edge. A signal is a safety filter to ensure you have a better chance of making money on a trade. If you dont have the discipline to wait for your signal then you have no edge over other traders.

Letting your own beliefs about what the market should be doing or your bias about what the market will do in the future can interfere with your discipline to follow your own trading system. A trader has to have the mental flexibility to understand anything can happen and also the discipline to follow their trading system so they will be able to capture the moves when they happen.

The discipline to follow your trading system is an edge. If your trading system has a quantified profit factor over a series of trades or you are a discretionary trader with rules that create good risk/reward ratios then your job is to simply be a disciplined trader and let your edge play out over time. You are your edge.