Self confidence and discipline are two essential qualities to succeed in any career you choose. In forex, unable to practice these qualities can lead to tangible losses, particularly your retirement nest eggs. Fortunately, anything and everything can be learned and developed over time. Here are 5 ways to boost self confidence and discipline in forex trading.
Have a Plan
Always have a way in and a way out. A detailed plan gives you the confidence to close positions at the right time, especially when holding a losing position. As the trade goes against you one pip at a time, your plan tells you to be confident and disciplined enough to see the trade through. Include key financial aspects including how much you can trade with per day, your maximum risk per trade, and what pairs you want to participate in.
Jot down all trading-related information on a journal including trade analysis, risk parameters, and emotions experienced at the time of the trade. Forcing yourself to record all positions you take each day instills confidence in how you trade. The habit also teaches you to be disciplined by actually doing something that requires effort before you pull any triggers. With a journal, you’ll likely feel less inclined to take low-quality trades because you end up trying to avoid the need to record every detail.
Perhaps one of the simplest ways to boost self confidence and discipline in forex trading is to do absolutely nothing. Staying in the sidelines when an actionable high-quality trade is absent shows your discipline in avoiding positions that expose your capital to high levels of unnecessary risk. Furthermore, by doing nothing when the markets are either inactive or too volatile, you trust yourself that there aren’t any opportunities being missed.
The more you know about the forex market, the better equipped you are at facing constantly changing conditions. You become more confident during explosive price movements, such as when central bankers shock markets with unprecedented comments and interest rate decisions. Conducting research about where economies and their respective currencies are headed in the future gives you the self-confidence to position yourself accordingly in such a way that risk is minimized yet potential gains are maximized.
Develop Your Systems Proactively
Work on your trading systems consistently. Though it’s a simple system and you think you’ve perfected its risk parameters, there is always room for change. Updating your trading system gives you the confidence to trade in different market cycles plus the discipline to actually view your trading methods at a microscopic level.