Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Top Lesson of 2023 - Discipline is Paramount in Rapidly Changing Markets

Top Lesson of 2023 - Discipline is Paramount in Rapidly Changing Markets

Diego Colman, Contributing Strategist

Share:

Forex for Beginners
Forex for Beginners
Recommended by Diego Colman
Forex for Beginners
Get My Guide

Trading in forex or other financial assets necessitates a steadfast commitment to a carefully devised plan and effective risk management. This year, I learned first-hand that straying from a well-established strategy impulsively can lead to detrimental outcomes.

My approach to trading has always been systematic and methodical. Before entering any trade, I meticulously outline my investment thesis, analyze crucial price levels, and pre-define both the assumed risk and profit targets. This disciplined approach has generally served me well, fostering a sense of control and rational decision-making. However, a specific case this year underscored the critical consequences of straying from these guidelines.

In the pursuit of larger profits, I found myself succumbing to the allure of greed. Believing that momentum was firmly on my side and that nothing could go awry, I took for granted my unrealized gains, keeping my position open for way too long. Then, in the blink of an eye, prices shifted against me, turning a winning trade into a large loss.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Diego Colman
Traits of Successful Traders
Get My Guide

By moving the goalposts, I deviated from my meticulously crafted trading plan, forgetting for a moment that markets can be unforgiving and unpredictable. In doing so, I violated the very parameters that had previously guided me to success, leaving me grappling with the aftermath of my own imprudent decisions.

The key takeaway from my personal experience is crystal clear: do not improvise or stray from the original strategy at a whim and always prioritize sound analysis over impulsive decisions, especially if you are speculating with short-term options, which was my case. My journey served as a vivid reminder that emotions like greed have the potential to obscure judgment and result in adverse outcomes.

Moving forward, I am committed to reinforcing the importance of discipline in my trading approach. I recognize that the allure of reaping greater profits should never compromise the foundation of a well-constructed plan. The cost incurred by deviating from the plan served as a tough yet essential lesson, instilling in me a revitalized commitment to adhere to my processes.

Top Trading Lessons
Top Trading Lessons
Recommended by Diego Colman
Top Trading Lessons
Get My Guide

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES