Golden Rules of Trading With Discipline

 

Trading with discipline can be one of the most challenging things to master. But at the same time, it is an essential part if you want to trade with success. The habit of trading varies from trader to trader, but they must build some strong trading rules and routines that will take them up the ladder of profits and success.

This article will discuss some golden rules of trading with discipline, which will help you become a serious and more obedient trader.

1. Constructing and following a trading routine

A trading routine should include these three core elements:

Pre-market analysis

Major hours trading in the market

End of the day hours

One should not break out from the trading routine and follow it diligently. It is better to follow and trade in major markets. Such markets include London, Tokyo, and New York markets.

In the major markets, price moves more noticeably, and such markets offer great setups too. You can check the economic calendar and look out for any announcements or events that can change your trading course. You can also use price action analysis to see if the prices have moved through the resistance and support levels.

2. Actively trading the first 3 hours of major market sessions

Markets like forex are open for 24 hours a day. But all those hours are not viable for trading, especially when you're a day trader. You need to pay attention to factors like momentum, volatility, divergences, direction, and trends.

After that, you need to choose between positional trading and scalping. You should take up positions that seem natural and obvious because that way, you have more chances of maximising your returns. You also must pay attention to your schedule of trading. The first three hours offer the best momentum, retracement, and trend.

3. Rewards for discipline

If all goes well, and you trade with utter diligence and discipline, you will be rewarded with high returns and profits. While trading with discipline, one of the major methods is to have more pips inside your account and fewer pips out of the account. The only true concern about trading with discipline is that you make fewer mistakes, and you are more focused.

4. The end of the day

When a major market session is about to end, traders still have a few hours left to exploit the market's movements. If you don't utilize these hours, then your trading might lose track until the next market session opens. Trading at the end of the day is different as you have to trade against the trends. This is because when most day traders take the profits from the market, the price recollects. Every time a buy position closes in the market, it leads to an automated sell back. The advantage associated with the end of the trading is that you don't have to continually monitor the market.

5. Do not the greed overpower you

No matter how experienced a trader or investor you are, do not violate your trading plan because you think you can earn more profits if you stay a bit longer in the trade. This can prove to be very detrimental in the long run. Even if you make more profits at that moment, you might make it a habit of staying longer than you should. This can lead up to massive losses in your overall trade. When the market has rewarded you by aligning with your direction, then respect it. Do not get carried away in the greed of more. The gold rule here for trading with discipline lies in profit-taking. Using stop loss and limit orders can prove to be helpful.

6. Stick to your trading method

Stick to a proven trading method and do not keep changing it every now and then. If you think that the trading method is not working, then do not go and devise a new one overnight. If your trading methodology works for more than half of the session, then stick to it. You just need proper money management in such a situation.

Conclusion

Trading with discipline is always a step-by-step process. You develop disciplinary qualities as you go on trading and rectifying your mistakes. One needs to show utter dedication and passion, and discipline will come naturally.

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