Trading Psychology · Trading discipline · Article 3 of 4
Knowing When to Wait
The market offers dozens of moves every day. You need only a few good ones. The rest are noise, and every poor trade you take costs you three times: in money, in confidence and in focus for the next decision.
CFDs are complex instruments and carry a high risk of losing money rapidly because of leverage. Make sure you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Write your stand aside list
Your plan says when to trade. Add a short list of when you won't. For example:
- In the 15 minutes before and after major data releases
- In markets you don't normally follow
- After you reach your daily loss limit
- When you're tired, unwell or upset
- When you can't say exactly where your stop loss goes
Read the list before each session. It turns “should I?” into a quick yes or no.
Let alerts do the watching
Staring at a chart for hours makes you want to act. Set price alerts at your key levels instead, then step away. When an alert sounds, check it against your plan. If it fits, trade it. If not, reset the alert and leave it.
Keep a passed trades log
Each time you feel tempted but stand aside, write down the market, the reason you passed and what the price did next. After a month, look back. You'll usually find that many of those trades would have lost, and that your rules were doing their job.
Warning signs you're trading for the sake of it
- You open a trade within minutes of closing the last one.
- You can't name the setup that made you enter.
- You feel relief, not satisfaction, once you're in a position.
- Your number of trades rises while your rule score falls.
