The #1 Skill To Trading Greatness- And A Simple Hack That Can Help You Develop It.
When it comes to trading Forex, home traders are ordinarily lured by the earning potential and time freedom that it can offer.
Whether it’s having more time to spend with family.
Taking regular holidays abroad.
Nice cars
A new house.
Whatever it is, these are the kind of the dreams you want to realise with the opportunities from trading the markets.
We all know it’s possible.
We only have to read the stories of trading giants such as George Soros, Jesse Livermore, Richard Dennis and Paul Tudor Jones.
Ok, it’s fair to say that these guys all came from a banking or hedge fund background which definitely helped they cause, but nevertheless they’re still living proof of the earning potential that trading can offer.
The Key Ingredient That’ll Make You A Trading Great!!!
If you’re an avid trading student like myself, then you’ve no doubts read all the important things you need to do and follow to become successful.
I’ve mentioned lots of these already in my weekly bulletins such as having a trading plan, following a process, having a proven and successful strategy, money management etc, etc.
While all these are essential, there’s one thing that trumps these over and over again.
And it’s without doubt the main reason, why some traders go on to become millionaires and others lose the majority if not all their money and quit.
Let’s face it, we more or less have access to all the same trading information, training, strategies etc, but still we see 90% of people fail as a trader
It all boils down to this one vital ingredient: DISCIPLINE!
It’s the foundation that everything else within your trading arsenal is built upon.
Learning about currency pairs, candlesticks, indicators, price action and strategies is generally easy – that just requires an investment of your time and you’re pretty sorted.
However, because most people who go into trading want to realise instant results, they ordinarily make poor decisions which results in significant losses and takes them out of the game before they’ve really started.
As Victor Sperando, a US trader, index developer, and financial commentator said
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.
The thing is we’re not robots. We’re human beings with our own unique feelings, emotions and of course personal goals.
This is why we:
- Don’t follow a trading plan.
- Chase trades due to the Fear of Missing Out (FOMO
- Revenge trade
- Talk ourselves out of good trades and into bad ones
- Exit trades too late
- Exit trades too early.
All these are tell tale signs of a poor disciplined trader.
So how do you overcome this so you can become one of the 10% who actually make it in this game.
A Simple Hack to Improve Your Trading Discipline
I recently I came across this cool but really simple technique that has proved popular and effective for lots of traders.
Introducing… ‘The 10 Minute Rule’
This technique comprises of just 4 steps, and is designed to sort of please and pacify the chimp side of the brain which is urging to break your discipline and trading rules.
Step 1: When you first identify that your discipline is potentially slipping , for example “I’m frustrated my trades aren’t getting filled so I’m going to chase the markets” OR “I’ve had 3 consecutive losses so I’m going to increase my trade size”…ACKNOWLEDGE IT.
Step 2: Immediately stop doing what you’re supposed to be doing in relation to your trading, set up a timer on your watch, phone, an alarm clock or online, for 10 minutes and press start.
Step 3: While the timer is running tell yourself that you can do whatever ever you like regards your trading, but only when the timer hits 10 minutes.
So for example, if you have the urge to over-trade or trade a bigger size, then you can say something like “I can make 15+ scalp trades today” “I’m going to up my risk to 5% for each trade, but not until the timer ends”.
Doing this prevents you from the friction of fighting against yourself and your chimp mind where you’re constantly saying such things as “I must not OVER-TRADE!” “I must not OVER-TRADE!!
Step 4: As you work through these 10 minutes, you’ve pleased and also calmed down your ‘chimp mind’ that’s going crazy to want scalp, scalp and scalp some more.
Also and more importantly you’ve bought yourself some time to:
Observe your thoughts,
Consider the consequences
Remove yourself from trying to negotiate with your emotional fuelled chimp that’s screaming for you to break all the rules.
The likely result at the end of these 10 minutes is that you’ve flipped to a more careful, logical mindset that’s once again aligned to your long term trading goals.
Hope you found this useful, and please give it a try and let me know how you get on.
