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Trading discipline or trader discipline in trading Binary options

Trading discipline or trader discipline in trading Binary options

Good day, friends!
Today we have another important topic that you can’t miss! I will tell you about trading discipline - the discipline that a trader should use in his trading.

Trading discipline in trading

What is trading discipline in trading? Trading discipline is the ability of a trader to perform the right actions even in the most difficult trading situations. But what are these “right actions”?

trading discipline

Correct actions or correct decisions are actions that ultimately lead the trader to making money. These actions can and will differ from the wishes of the trader. For example, Martingale trading on Binary Options: many traders know that this method of trading leads only to the loss of money, but, psychologically, using this method is beneficial. The trader’s trading discipline forces him to comply with risk management rules, which leads to not to drain the deposit, but to earn money, in contrast to the rules of trading with Dogon or Martingale.

What you want is not always true, and even the simplest path can be wrong. Trading discipline teaches a trader to avoid many mistakes in trading, which may be associated with:
  • Emotional background of a trader
  • Uncertainty
  • Fears
  • The physical condition of the trader
  • Desires to deviate from the rules of the trading method
Trading discipline is the link between profitable trading and the actions of the trader. Without trading discipline, you will not be able to trade profitably! Trading is a very emotional activity, which not every person is ready for, not to mention novice traders.

Even experienced traders have periods when they are unable to cope with their emotions. Yes, they are actively studying trading psychology, know how to manage your capital, but emotions are emotions. Greed or fear of loss appears, that’s all – trading goes into the red because the trader cannot control himself. It is in these situations that trading discipline very well saves you from serious losses.

A trader’s experience accumulates all the time - this cannot be avoided, just as the sunrise cannot be avoided. In trading, experience is not only time to show off to others, but also knowledge. Knowledge that allows you to intuitively trade, taking the necessary and correct actions, without even thinking about them. This can be called trading intuition, but in fact it is trading discipline.

discipline in binary options trading

Watching an experienced trader work is always a pleasure. This type of trader:
  • He is calm because he knows that he cannot lose all his money - there are no risks
  • Attentive because there are no fears that will distract him
  • I am confident because I have vast experience backed by knowledge
  • Fearless, because any development of events is spelled out in his trading plan
From the outside, all the actions of a professional look very easy and understandable. In such a situation, you involuntarily think: “Trading Binary Options - what could be simpler?! All actions are very logical, and I can do it too!” What in practice? Many factors prevent you from repeating all the same logical actions. But how do trading professionals do this?

It's all about their trading discipline, which they developed over months, or even years. Trader:
  • He is calm because he has risk management rules, but he also has the discipline to follow these rules!
  • Attentive because he must be attentive - trading discipline taught him to set priorities while trading!
  • I am sure, because past experience has shown that being disciplined is much more profitable than trading with luck!
  • Fearless because there is a trading plan and there is discipline that forces you to strictly follow this plan in any situation!
As a result, such a trader is a winner, while many around are losers. It would seem that this is the key to success - you just need to take the right actions, no matter what! But go ahead and try trading like this, what will happen to you? And the result is the following:
  • Anxiety will replace calm - there are rules for risk management, but trading using Martingale seems more logical, and who needs these rules anyway?!
  • Attention will disappear instantly, and all attention will be focused on the numbers displaying the trading balance on the Binary Options broker platform
  • Confidence? How can you be confident if trading is always going negative or with varying degrees of success?!
  • Fearlessness? You forget about the trading plan as soon as losses or profits begin - there is no difference
For an experienced trader, earnings are a side effect of trading; there is no escape from it if everything is done correctly. For a novice trader, earning money is the whole point of trading; what kind of compliance with established rules can we talk about in such a situation?! Where a novice trader will continue to lose money because he wants to win back, an experienced trader will accept the losses and end the trade, because “I have rules for risk management, and I also have a trading plan - in this situation I should stop trading, even if and I don’t want to.”

This is the difference between a beginner and an experienced trader - one does what he wants, and the other does what he should. And all this difference can be summed up in a few words – trading discipline.

successful binary options trader

During the entire time I was working on the site, I communicated with many traders. Most of them are novice traders who came for advice. I could describe to them money management rules, indicate on the fact that you need to draw up a trading plan , keep a trading journal and analyze your trading , and also that you must strictly follow all these rules, including the rules of their trading strategy.

Do you think there were stupid people there? Not at all - they understood what I was talking about, they understood why this needed to be done and how important it was. But they still did as they wanted. Having all the necessary knowledge, they could not follow it, because there is no trading discipline. I can’t force them to do what needs to be done - I can’t stand with a stick behind my back and hit them on the hands every time a trader starts doing something to please his desires. The trader himself must understand that this is very important for himself.

This is very difficult, especially when you think: “I’ll do it right now, and I’ll get a profit in a week or a month, or I’ll do it the way I want and get my profit in a couple of minutes.” Which option do you think is most often chosen? That's right - the fastest and easiest. But trading is not a sprint, trading is a marathon. If you have the opportunity to get money very quickly and easily, then you have the opportunity to lose it just as easily and quickly!

The opposite is also true: if it is difficult for you to earn money, then it will be just as difficult to lose your money. All professional traders know this very well, so they are in no hurry - the profit itself will jump into their pocket. And in general, only one thing is required of an experienced trader - every time to perform the same actions that will lead the trader to success.

Trading for a novice trader looks like walking on a tightrope over an abyss: if you walk the tightrope, you will make money; if you don’t, you will lose everything. Trading as a professional trader can easily be compared to a walk on the sidewalk: a puddle - you can go around, repair roads - you can wait until they are completed, a sunny day - why not walk further than you wanted. A professional has no concept of “losing” or “losing everything”; there are only temporary difficulties, overcoming which the trader will still move forward.

How to develop or improve your trading discipline in Binary Options

If trading discipline is one of the key success factors, then it is logical to assume that you are interested in ways to improve your discipline. As you might already understand, almost all methods are practical. First of all, you need to learn to think differently - probabilistic thinking.

Probabilistic thinking and trading discipline in Binary options trading

Probabilistic thinking is the mindset of a trader when he least of all thinks about the results of trading, based on the knowledge he has acquired. Let's look at an example: a novice trader who has had several unprofitable trades thinks that the next trade will close at a loss (on a subconscious level, he wishes, of course, differently), and if there were several profitable trades, he believes in his success and believes that the next deal will also close in profit.

probabilistic thinking in binary options

An experienced trader understands that a series of profitable or unprofitable trades (as well as a series of profitable or unprofitable days, weeks, months, years) cannot last forever. After each profitable trade, the likelihood that the next trade will close at a loss increases. After each losing trade, on the contrary, the likelihood that the next trade will close in profit increases. This is a simple theory of probability. Of course, understanding this information, an experienced trader always hopes to make a profit - he is not a pessimist, but a realist!

Probabilistic thinking makes it clear to the trader that losses can be waited out - they will someday end and be replaced by a series of profitable trades, which, by the way, will also not last forever. Profitable trading has always been replaced by a series of losing trades - this is normal. That is why you need to lose a minimum where trading is at a loss and earn more where trading is going well - a simple rule: “We earn more than we lose!” The trader himself makes money on this difference between earnings and losses.

So how do you develop probabilistic thinking? There is one simple, at first glance, exercise that is recommended to all novice traders so that they develop discipline and believe in it. The rules for this exercise are as follows:
  • According to risk management rules you need to allocate money for 20 trades that you don’t mind losing (you can trade even with a minimum investment amount from your broker)
  • Choose a trading strategy at your discretion and write down the rules for opening transactions
  • Make 20 trades using this strategy, investing in each trade a fixed amount that was allocated in advance for each trade
  • If at least one transaction was opened NOT according to the rules of the trading strategy or in violation of the established risk management, then the exercise must be started from the very beginning
"Ha! Unhappy 20 transactions - any simpleton can handle it! Exercise for me too!” - you will count. But in practice, 99% of traders do not complete this exercise the first time. 85% of traders fail this exercise the fifth time they try it, and 60% of traders never do this exercise.

Do you think it’s so easy to force yourself to do something you don’t want to? There is always a temptation to take the easy way - trade using Martingale and open trades where I want it! But that’s why it’s an exercise, to develop discipline in a trader.

By the way, as a rule, the results of this trade bring profit to the trader - of course, it is not big, but it is better than losing money. And if you take into account the fact that many novice traders do not believe that you can make money by trading a fixed rate, then this is a very big success for you - you will not only believe in such an opportunity, but also experience it in practice!

By the way, I used this exercise when I realized that trading with the Dogons means always losing your money in trading. It was difficult, but as time shows, I managed to cope with it. Repeating this exercise over and over again, I realized one very important thing - the right actions always lead to good results!

How to develop your trading discipline to perfection in Binary Options

This exercise, which I described above, of course, gives very good results, but it is more aimed at teaching the trader probabilistic thinking - thinking that allows you to treat any trading situation with the same ease. We are interested in complete control over ourselves.

how to develop your trading discipline

Trading discipline should be developed gradually - you most likely will not be able to do everything at once. To begin with, you must understand what a trader’s profitable trading consists of: Your trading discipline should force you to follow all the rules! Trading psychology is very important for a trader - it is developed over months or even years. Of course, you won't spend that much time on theory alone, so you can replace trading psychology with trading plan!

Here is your first starting point - create a trading plan and develop your trading discipline on it. The trading plan itself includes:
  • Rules of risk management and money management
  • Trading strategy rules
  • Time management
And if the previous exercise teaches you to enter a trade strictly according to the rules of a trading strategy, then here you must combine these actions with the rules of RM (Risk Management), MM (Money Management) and time management. Your task has become more difficult! But the rules remained the same:
  • Make a trading plan
  • Allocate money for trading
  • You trade strictly following the rules of the trading plan
  • If any component of the trading plan is violated, start the exercise from the very beginning!
Remember forever - trading discipline either always exists, or there is no discipline at all! There is no such thing as “Today I am disciplined, but tomorrow I will not observe discipline”! Did you make a mistake somewhere? Start the exercise again! Until you complete this exercise, you can’t even dream about making money in trading. Think of it as a driving school - if you pass your license, you will be allowed to drive a car; if you don’t pass, you pose a threat to others, so you won’t get behind the wheel!

Once again - perform this exercise to the bitter end! Happened? Do it a couple more times to make sure it wasn't a fluke! I have no way to control you, and you are doing this only for yourself - the results will also be yours!

Once you've done this exercise, train yourself to write everything down in your trading journal ! As for me, this is the easiest part, after such hassle. I think it will seem like a piece of cake to you too - the worst is already over. But still:
  • Make a trading plan
  • Allocate money for trading
  • You trade strictly following the rules of the trading plan, and enter all information in a trading journal
  • If any component of the trading plan is violated, start the exercise from the very beginning!
After three or four completely completed attempts, you are ready to trade and make money on Binary Options. Consider yourself allowed to increase your trading balance a little and trade for profit.

Creating an anchor - how to simplify the formation of trading discipline for a Binary Options trader

Forming your own trading discipline is an extremely complex process. Therefore, smart and psychologically prepared traders have come up with one very effective way to simplify this task. We are talking about creating an “anchor” that will stimulate you to make the right decisions.

anchor in trading discipline

An “anchor” is usually a tangible thing that serves to create a profitable trading association. Personally, I used a wristband, which I put on before doing exercises, and after and before trading itself. Also, my anchor was a keychain, which was always in a visible place and reminded me that I needed to strictly follow the plan.

Many traders use completely different things as an anchor:
  • Someone is very dependent on certain music
  • Someone adjusts the lighting to suit themselves
  • Someone uses small things (like me)
  • Someone can't trade profitably unless they're wearing their "lucky" T-shirt or their favorite slippers
  • Someone approaches the issue radically - prints out the phrase “FOOL, DON’T YOU DARE BREAK THE RULES!”, which then constantly hangs before your eyes
Any of your wishes will do, the main thing is that you create an association between this thing and making the right decisions. An anchor helps you stay in your comfort zone - it's like a box for a cat in which it feels safe.

Visualization as a way to develop the discipline of a Binary Options trader

Visualization is, in practice, the ability to imagine (or suggest) yourself as a successful person (trader). This technique is used in almost all areas of life: business, sports, hobbies, etc.

visualization in trading

You literally need to visualize everything you do while trading. Visualization begins with relaxation:
  • You need a network in a comfortable position
  • Close your eyes
  • Even out your breathing
  • Relax and escape from all extraneous thoughts
In this state you should imagine:
  • The furnishings of your room where you trade
  • The smells that surround you
  • Lighting your room
  • All the small details: how things are laid, what’s on the table, what the chair is made of, etc.
  • After this, you should imagine how you prepare for trading: how you check the trading journal, how you create a trading plan, how you check the economic calendar, how you open the broker's trading platform
  • The trading process itself. Imagine how you start trading, how you follow your trading plan, how you follow the rules of risk management, how you are focused on searching for signals, how you are not influenced by emotions - you are calm, how you calmly close a trade in profit, how one of your trades is closed in loss - you are still as calm as you finish a trade, as you fill out a trading journal, as happy with your results.
The more little things you take into account, the better the result you will get. All this takes 10-15 minutes at a time, it is advisable to carry out this procedure twice a day - before trading and before bed. In this case, the effect will be most noticeable. Don't doubt this method - it works! You are simply forcing your brain to think while trading in the same way that you would when visualizing your trade.

25 rules of discipline for a Binary options trader

  1. The market pays you for your discipline! The better you are at performing the right actions in a variety of trading situations, the greater results you will achieve in trading.
  2. You always maintain discipline - 100%, or you are not disciplined at all! There is no time when you can give up discipline in trading. Any violation of the established rules indicates that there is no discipline, which means you should not count on good trading results.
  3. Lose less if trading goes poorly! Periods of profitable trading are always followed by unprofitable periods. Learn to lose less where possible - stop losses by ending the trade. Never try to get even - it's a one-way ticket.
  4. Do not turn a profitable trade into a losing one! After opening a trade, always wait for the result - do not close it ahead of schedule, even if you think it will be unprofitable! There are situations when a deal turns out to be profitable at the last moment. In addition, once you opened a deal, you knew in advance that you could lose the investment amount - you accepted the possible losses in advance, so let the deal close as planned in advance.
  5. You shouldn't lose more than you earn! Always monitor your risks - if trading goes badly, then stop trading immediately. If trading goes well, then allow yourself to make a big profit.
  6. Always be yourself! Select trading strategies only to suit your trading style.
  7. Adjust your trading to suit you! If you don’t like something in your trading strategy, change it, add it, remove it. First of all, you should be comfortable trading, if you don’t have this comfort, then find a solution to this problem.
  8. Tomorrow will be a new day for trading! If you suffered losses today, do not be discouraged - tomorrow will be a new day, with new opportunities. The main thing is to preserve your trading balance today for future success.
  9. Earn the right to trade large sums! Even if you have large sums to trade, start trading with small investments. Gradually move from small amounts to large ones.
  10. Avoid unnecessary losses! If a transaction is not justified by any of your rules, then do not do it. There is a high probability that it will close at a loss.
  11. The first realized loss is the most important! You must understand that losing trades are also part of profitable trading. You can't do without them.
  12. Don't hope and don't pray. If this happens, then you have already lost! All this happens when you begin to fear for your transaction - you have invested too much in it (violated the rules of risk management or exceeded your psychological threshold).
  13. Don't worry about the news! Trading on news is a rather complex trading method. If you do not have the necessary knowledge, then simply miss the release time of important economic news.
  14. Use the desired time frame of the chart! Choose a chart for your strategy. Remember that long-term options have fewer signals, but the results are better than turbo options.
  15. Love losing money! In any case, you will have to deal with losing trades, so think positively about them - “This had to happen sooner or later, but this is even good - the likelihood that the next trade will close in the black has increased!”
  16. If your transactions do not bring profit for some time, then it is better to quit trading! End the trading session immediately if you see that trading is going to 0 - this is a bad sign, indicating that you most likely will not make money today.
  17. Don't let yourself lose too much! Always trade an amount not exceeding 5% of your trading deposit.
  18. Break your goals into small pieces! Learn to set the right goals, and then break them down into time periods. Thus, you will have many tasks that you will complete every day or week.
  19. Don't try to win back with one deal! One deal does not solve anything - on the contrary, it will greatly hinder you in the future. Don't bet all your money on the forecast of just one trade - you will lose!
  20. Consistency creates confidence and control over the situation! Do the same actions every time - this is the key to your success!
  21. Know how to manage your capital! Always follow the rules of risk management and money management - without them you will lose!
  22. Make the same transactions as often as possible! Trade strategies that bring you profit and the work of which you understand very well.
  23. Don't hesitate and don't analyze the chart for too long! The more you think, the greater your doubts will be - you will begin to notice things that will contradict your trading rules. Trade easier: if you saw a signal, you opened a deal!
  24. All transactions are the same in the eyes of the market! The market doesn’t care whether you opened a deal worth $10 million or $100 million - it won’t notice it and will still do it as it wants. So, first and foremost, think about yourself and your trading balance - don't risk too much because you might lose it.
  25. The market is always right! Don't try to prove something to the market - it will win and you will lose! Your task is not to change the market, but to silently follow it wherever it goes.

10 ways to improve discipline

  1. Make a trading plan, including everything you need. Read it every day before trading.
  2. Start playing sports. Sport requires good discipline from a person, so train yourself to observe it not only in trading.
  3. Find a task for yourself that you have been putting off for a long time (get up in the morning at 8 o’clock, go to bed no later than 11, start running every morning, etc.). Complete this task for two weeks.
  4. Introduce something new to your assignments over time. For example: in the first week, you devoted 30 minutes to sports every day, in the second week, increase the time to 45 minutes, in the third week - up to 60 minutes. Make your task more difficult - this will increase your discipline.
  5. Find someone to whom you will be held accountable for your progress in improving discipline. We follow our own rules much better if someone else checks and controls us.
  6. If necessary, find a coach or mentor who will hold you to task.
  7. It is difficult for traders not to trade when they want. Learn to trade only when your trading plan allows it - turn trading into a strict set of rules, and not into a game when you have a free minute.
  8. Create a routine for your day. At the end of each day, check to see if you were able to keep it.
  9. If you don’t want to enter into a trade, switch to something else not related to trading: do 20 push-ups, make coffee, go to the balcony to breathe. You need to take a break from trading for 5-10 minutes and switch your brain to something else.
  10. Do charity work. It takes a lot of willpower to selflessly help someone by giving your money.
Don't try to do everything at once - choose a couple of tasks for yourself and work on them. The effect will not be long in coming, so over time you will have discipline not only in your life, but also in trading.
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