When you trade on the foreign exchange Sydney you need look at the amount of discipline that you have. To be a disciplined trader you are going to trade without emotions and stick to your trading strategy. If you do not complete these objectives then you are not a disciplined trader and you will run the risk of losses with your trading.
Good Trading Habits on the Foreign Exchange Sydney
To stay disciplined it is important that you have habits that can help you. Cultivating these habits in your trading limits the amount of control your emotions have on your trading:
- Set realistic targets and stick to them. You should have a set amount of pip targets for each day or week depending on your trading system. These targets must be realistic because unrealistic targets cause anxiety as you are never able to reach them. Once you reach these targets you should stop trading because over trading causes as many problems as emotions.
- Have a trading plan and system that you stick to. Before you start trading it is recommended that you develop a trading system and plan that suits your trading style. These plans should be used every time you trade and you should stick to them. Plan should not be changed while you have open trades, but they can be changed once your trades are closed and you have time to test the new strategy.
- Time your trading hours correctly. If you are trading certain currency pairs there are times when the market works best. You should always trade during these time and only these times.
- Take breaks during your trading hours. Traders are only able to trade for a set number of hours before fatigue and emotions take hold. Taking breaks throughout these trading hours is important as the slight break can refresh you.
The Controlling of Emotions
- Profitable positions also cause a number of emotions with the most detrimental being greed. As a trade becomes profitable it is human nature to want to increase the amount of profit. This is a very bad thing as no one is able to say with certainty which way the market will go. The trade may continue to rise but the trend could swing. Using a trailing stop loss level is one way to ensure you always maximise your profits. Of course, you should stick to the trade and not change anything too much because this could cause major losses.
- Controlling emotions is the most important aspect in disciplined forex trading. The emotions that are felt by traders are all negative but come at different times during trading. The most common emotions trader feel are fear, anxiety, greed and panic. All of these emotions cause decisions that are not based on fact which can cause losses.
- There are certain emotions which come when a trade is negative. These emotions are generally fear, anxiety and panic. All of these emotions stem from the potential loss of money. A way to control these emotions is to not use money that you cannot afford to lose when you trade. If you do feel these emotions when trading you should stick to the trading plan you have. The plan was created for these times when emotions generally run high.