IMO, here is the core requirement:
1. You must have a plan (or a system, method, strategy, approach..... call it what you will). It doesn’t have to be completely mechanical, but the core rules must be non-negotiable. Why? Because at virtually every point in the market, there are valid reasons to buy, and valid reasons to sell, depending merely on one’s perspective. Without a plan, all you’re doing is second guessing which way the market is about to move. Guessing is gambling. And it's even more important to have a plan for exits: when you're sweating over money that's at risk, if your response is not a measured one, then it can only be an emotional one.
2. The plan must be on-balance profitable. Costs make forex a negative sum exercise, and if your plan doesn’t include at least one artifice that turns these probabilities around, you can’t hope to succeed in the longer term; randomly made entries and exits just won’t cut it. Whether it's simple or complex doesn’t matter; whether the edge lies in the entries or exits doesn’t matter; whether it’s high win/low RR or low win/high RR doesn’t matter; the only requirement is that it’s got to win more than it loses over time. Yet (such is the chaotic nature of the market) this is not necessarily as easy as it might seem.
3. You must believe in your plan unreservedly. Perform whatever testing you need to totally convince yourself that your plan is long-term, rock-solid profitable. Otherwise, after a few losses, the doubts will creep in, and eventually you won't be able to stay with it. Then you’ll start looking for another plan, and then another, ...... and end up going around in circles. That’s how I wasted my first 2 years.
4. Play for a level of stakes that you’re totally comfortable with. Work out what loss per trade you can comfortably stomach, and then size your risk, and your positions, accordingly. If you over-leverage yourself emotionally, you’ll never be able to keep to your plan: scared money never wins.
1. You must have a plan (or a system, method, strategy, approach..... call it what you will). It doesn’t have to be completely mechanical, but the core rules must be non-negotiable. Why? Because at virtually every point in the market, there are valid reasons to buy, and valid reasons to sell, depending merely on one’s perspective. Without a plan, all you’re doing is second guessing which way the market is about to move. Guessing is gambling. And it's even more important to have a plan for exits: when you're sweating over money that's at risk, if your response is not a measured one, then it can only be an emotional one.
2. The plan must be on-balance profitable. Costs make forex a negative sum exercise, and if your plan doesn’t include at least one artifice that turns these probabilities around, you can’t hope to succeed in the longer term; randomly made entries and exits just won’t cut it. Whether it's simple or complex doesn’t matter; whether the edge lies in the entries or exits doesn’t matter; whether it’s high win/low RR or low win/high RR doesn’t matter; the only requirement is that it’s got to win more than it loses over time. Yet (such is the chaotic nature of the market) this is not necessarily as easy as it might seem.
3. You must believe in your plan unreservedly. Perform whatever testing you need to totally convince yourself that your plan is long-term, rock-solid profitable. Otherwise, after a few losses, the doubts will creep in, and eventually you won't be able to stay with it. Then you’ll start looking for another plan, and then another, ...... and end up going around in circles. That’s how I wasted my first 2 years.
4. Play for a level of stakes that you’re totally comfortable with. Work out what loss per trade you can comfortably stomach, and then size your risk, and your positions, accordingly. If you over-leverage yourself emotionally, you’ll never be able to keep to your plan: scared money never wins.