The 25 Rules Of Forex Trading Discipline - Part 21/25 Disciplines

21. LEARN TO SWEAT OUT (SCALE OUT) YOUR WINNERS.
The net effect of scaling out of your winners will be an increased average win per trade while keeping your losses to your pre-defined risk parameters. You should never scale out of your losers. If your trade size is more than a one lot and your trade is a loser, you must exit the entire position en masse. If your trade size is more than a one lot and your trade is a winner, it is best to exit one-half of your position at your first price target.

If you trade with protective stop-loss orders, you should amend the order to reflect the change in trade size (remember you have exited onehalf of your position) and raise or lower the stop price, depending on whether its a long or short position, to your original initiating trade entry price. You now are essentially playing with the houses money.

The 25 Rules Of Forex Trading Discipline - Part 16/20 Disciplines

16. IF YOUR TRADE IS NOT GOING ANYWHERE IN A GIVEN TIMEFRAME, IT’S TIME TO EXIT.
This rule relates to the theory of capital flow. It is trading capital that pushes a
market one way or another. An oversupply or imbalance of buy orders will push the
market up. An oversupply of sell orders will push the market lower. When price stagnation is present (as typically happens many times throughout the trading session), the market and its participants are telling us that, at the present time, they are happy or satisfied with the prevailing bid and offer.

You dont want to be in the market at these times. The market is not going anywhere. It is a waste of time, capital and emotional energy. Its much better to wait for the market to heat up a little and then place your trade.

The 25 Rules Of Forex Trading Discipline - Part 11/15 Disciplines

11. THE FIRST LOSS IS THE BEST LOSS.
Once you come to the realization that your trade is no good its best to exit immediately. Its never a loser until you get out and Not to worry, it'll come back” are often said tongue in cheek, by traders in the pit. Once the phrase is stated, it is an affirmation that the trader realizes that the trade is no good, it is not coming back and it is time to exit.

12. DON’T HOPE AND PRAY. IF YOU DO, YOU WILL LOSE.
When I was a new and undisciplined trader, I can’t tell you how many times that I
prayed to the “Bond god. My prayers were a plea to help me out of a less-than-pleasant trade position. I would pray for some sort of divine intervention that, by the way, never materialized. I soon realized that praying to the 'Bond god' or any other 'futures god' was a wasted exercise. Just get out!

The 25 Rules Of Forex Trading Discipline - Part 6/10 Disciplines

6. DEVELOP A METHODOLOGY AND STICK WITH IT. DON’T CHANGE METHODOLOGIES FROM DAY TO DAY.
I require my students to actually write down the specific market prerequisites (setups) that must take place in order for them to make a trade. I dont necessarily
care what the methodology is, but I do want them to make sure that they have a set of rules, market setups or price action that must appear in order for them to take the trade. You must have a game plan.

If you have a proven methodology but it doesnt seem to be working in a given trading session, dont go home that night and try to devise another one. If your methodology works more than one-half of the trading sessions, then stick with it.

7. BE YOURSELF. DON’T TRY TO BE SOMEONE ELSE.

The 25 Rules Of Forex Trading Discipline - Part 1/5 Disciplines

1. THE MARKET PAYS YOU TO BE DISCIPLINED.
Trading with discipline will put more money in your pocket and take less money out. The one constant truth concerning the markets is that discipline = increased profits.

2. BE DISCIPLINED EVERY DAY, IN EVERY TRADE, AND THE MARKET WILL REWARD YOU. BUT DON’T CLAIM TO BE DISCIPLINED IF YOU ARE NOT 100 PERCENT OF THE TIME.
Being disciplined is of the utmost importance, but it's not a sometimes thing, like
claiming you quit a bad habit, such as smoking. If you claim to quit smoking but you sneak a cigarette every once in a while, then you clearly have not quit smoking. If you trade with discipline nine out of ten trades, then you can't claim to be a disciplined trader. It is the one undisciplined trade that will really hurt your overall performance for the day. Discipline must be practiced on every trade.

The 25 Rules Of Forex Trading Discipline - Part introduction

The success that a trader achieves in the markets is directly correlated to one’s trading discipline or lack thereof. Trading discipline is 90 percent of the game. The formula is very simple:Trade with discipline and you will succeed; trade without discipline and you will fail.

I have been a trader and member of the Chicago Board of Trade (CBOT) for 20 years.
During my successful pit-trading career as a scalper, I traded in three different contract markets: 30-Year Treasury bonds at the CBOT, the S&P 500 at the Chicago Mercantile Exchange (CME) and the Gilts at the London International Financial Futures Exchange (LIFFE). Currently, I also trade the electronic $5 Dow futures contract on the CBOT as time permits.

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