Refining a technical system, understanding the fundamentals of the market, absorbing the markets' sentiment as well as studying the price actions are all the basic elements of making good entries and identifying good setups for your trade.
But none of these are useful unless you have blend them well with true self-patience and discipline.
Trust me, even after 9 years of trading forex, I still regard these 2 components are the remaining 20% of the subject that I have yet to fully graduate. It's definitely easy said than done for sure. By looking at the figure itself, clearly it is a Pareto Rule in which these 20% gaps consistently contribute to the 80% of my trading problems.
PATIENCE... PATIENCE... PATIENCE...
If only I could wait a little bit longer, I would have gotten a better entry or probably exit price for the trade. If I could be a little bit more patience, If, If and If... the story lines remain the same.
DISCIPLINE... DISCIPLINE... DISCIPLINE...
Same thing here. Why didn't I stick to the Risk Management plan that I have developed upfront? Why was I so impulsive to jump in without really seeing the big picture? Why didn't I stick to the set TP and SL target? and so on. Lack of discipline making you into a highly emotional trader that decides impulsively from time to time.
Sounds common right? I knew you agree with me.
Nevertheless, there is a solution to these problems.
PRACTICE... PRACTICE... PRACTICE...
Yes. Practice makes perfect. What else?
Patience and Discipline can be practiced indeed. Though it may take a while, but through a systematic approach for your trading, you will improve your patience and discipline as time goes by.
Let me give you some tips on how to practice patience and discipline for your trading. I call it the RWAPD Method. Of course I developed this myself and self-applied on day to day basis. Trust me, it works!
1. Relax - Always start your day with a deep breath. Just relax. If caffeine can help you on that, go get a cup of coffee before you switch on your MT4.
2. Wait and Watch - Sit in front of your notebook and watch what's going on. As you know, the markets are basically having 4 kind of moves in general, so just watch what the market is doing right now whether it is ranging sideways, choppy, trending or about to break out.
3. Analyse and Assess - After doing the first two, then only you start analyzing and assessing the overall market's condition. What time is it now? Is the market tradable? Who's in control - The Bulls vs The Bears? Is there any news coming up? Where are the support and resistance? Etc etc. Analysis should cover all the 4 elements of technical, fundamental, sentiment as well as price action.
4. Paper Trade - Now that you have analysed the market accordingly, doesn't mean that the market will move accordingly to your analysis. Unless you really see a very good setup in front of your eyes that gives you no reason not to enter, the best is always to paper trade. This is how you develop your patience and discipline accordingly by not jumping into the market straight away. Just open imaginary positions by writing the intended short or long position on a piece of paper, or probably in your trading journal if you have one. From there, see how it goes. If the Paper Trade turns out to be good, wait for the next wave to enter. If it turns out to be bad, you knew that you saved yourself for a better trade then. Don't worry on missing a good trade, worry more on entering a bad trade. Yes, it is that simple.
5. Decision - Now after doing all the 4 things above, it is time to decide. Should you enter or should you just stay away from the market. Of course you can also set pending orders, which is totally up to you. If not sure, take my advise just by staying out, at least for a while. Why? This is because to me "NO TRADE IS ALWAYS BETTER THAN A BAD TRADE". So you decide wisely. The make or break of your account is just a click away from the market. If you are not careful, the market will always have this power of mass destruction to your account, and vise versa.
Alright. I hope it helps especially to those aspiring new traders out there. I am not an expert but for sure I know what I'm doing.
Till then, have a nice day!
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