Forex Psychology and Discipline: Why Patience Pays More Than Speed

When new traders enter the forex market, they often make one simple mistake: they want to do everything as quickly as possible. It’s pretty much the same with any skill, but you’re not going to play Stairway to Heaven the first time you grab a guitar, and you’re not going to be a master trader on your first day on the market.

It can be a hard pill to swallow. After all, in many circles, forex trading is marketed as an easy, quick way of securing some extra income. Many newbies, feeling emboldened by such statements (and perhaps some beginner’s luck), end up losing more than they can afford. Of course, this often discourages them from trading entirely. In the most extreme cases, these dispossessed newbies start thinking that trading as a whole is a scam.

It isn’t. Trading is a skill like any other and as such, needs to be honed. Traders who believe they can just go in, conquer the markets, get rich, and get out are deluding themselves. The right approach requires a good routine, a decent amount of effort, and the discipline to carry through.

This article will tackle the exact reasons why it’s better to take your time, as well as offer some pointers on how prospective traders can take a step-by-step approach to their education and development.

Trading Fundamentals

Needless to say, it’s impossible to get good fundamentals while approaching trading quickly. Trading and finance as a whole are extremely deep topics that take years to master, and can never be fully understood.

Some feel like they can simply recognise the basic terms needed for forex – lots, pips, spreads, leverage, and they are good to go. However, in reality, just knowing what each of these words means doesn’t equal understanding the concepts, much less knowing how they function in a trading environment.

Most things in trading are interconnected. A trading strategy requires you to know how to sensibly connect various concepts into a single streamlined trading course. As such, knowing how leverage can affect your lot sizes and how spreads affect the movement and profitability of your trades is crucial. These are all fairly basic skills that traders can learn early on, but only if they actually take the time to learn them.

So, in the early stages of your forex trading education, understanding, not recognition, should be your goal. Knowing how the terms you learn affect real trading situations is key. That’s why it’s recommended to run a demo account while you learn, so you can put what you see in practise without risking your money.

If you’re lost on where to start learning, there are many free courses (including our own IronFX Academy) that are completely free. This lets you focus on learning instead of searching for the next concept in a sea of foreign ideas. Additionally, AI tools like ChatGPT can help simplify, clarify, and give specific examples, sometimes proving invaluable in learning trading.

Platform Functions

An often understated aspect of trading is that traders need to take time to understand trading software. Sure, some things may be obvious at a glance, but others aren’t as clear.

This can present a large issue. It can mean not placing trades correctly, or accessing the wrong asset due to not understanding how the lists work. Alternatively, if the forex platform lets traders modify leverage on the fly, it can lead to you accidentally opening a much larger position than intended. In other words, this can accumulate losses quite rapidly and drain accounts before they get off the ground.

Again, the forex demo accounts are there to help. Once you find a broker, you can check out its platform for free if it provides a demo account. This will allow you to explore all of the key features, once again, without the risk of losing any of your own money.

Some of the key features for new traders are:

• Opening the asset list and finding the correct assets
• Opening and reading charts
• Understanding position sizes and opening appropriately sized trades
• Setting take profits and stop losses
• Accessing open positions and closing trades
• Accessing trade history and understanding past positions

These are the very basics of forex, and learning these interface features shouldn’t take more than a few hours of fiddling around with the platform. However, it is crucial that you do spend those few hours, as a misunderstood or mis-sized trade can wreak havoc on your funds.

Forex Market Situations

This is perhaps where the difference between someone who takes their time and someone who rushes into trading shows the most. Markets are unpredictable, yes, but not to an extreme degree.Someone who understands why markets are moving, or recognises a pattern from the past, is still much better off than someone who’s completely clueless.

A large part of forex trading comes down to experience. Again, the best way to gain that experience is to actually trade via a demo account. Of course, it’s not one-to-one. A demo is much less emotionally impactful, and the simulated environment, unlike real trading, offers pretty much perfect conditions.

However, it’s still wise to spend a few weeks on a demo before moving on to a real account. This will allow you to understand how the market reacts to certain situations, and navigate those situations properly when you start trading on a live account.

An added benefit is that it allows your knowledge to settle. When learning something, we all need something of a cooldown period for the new material to no longer feel fresh. This demo trading period offers that, along with a pattern of repetition that also does wonders for learning.

A Proper Path fro forex trading

While we’ve outlined some of the steps traders can take, we’d still like to reiterate and show a more structured path for newer traders. Now, ideally, we’d outline approximate times to, but this is more difficult. Everyone has their own pace of forex learning, and different schedules can lead to wildly different results. However, traders are generally advised to exclusively learn and demo trade for at least about a month before they try live trading.

Here’s a short example of an education path for a new trader:

• Find a free trading course
• Learn key terms and concepts (lot, pip, leverage, technical and fundamental analysis, trading psychology, market mechanisms, etc.)
• Ensure that you are actually familiar with all of these concepts – you may quiz yourself or use flash cards
• Once you’re comfortable, access a platform and play around, learn the key features
• Start working on developing a trading strategy
• Trade with your actual strategy to practice it until you feel ready to hit the markets

Final Notes

Before we sign off, there’s none more important detail to note. Traders who do take the slow, disciplined approach tend to fall into autopilot mode after a while. This is crucial to avoid, as you’re doing only slightly more than wasting time.

Make sure that, while you are practicing forex trading, you are actually paying attention to what you are doing. This is the only way to actually learn the sometimes-complicated concepts required to truly understand trading. Other than that, make a routine, stick to it, and you may just be surprised at how comfortable your market handling can become.

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