Discipline: the rules you do not break
What you learn in 3 minutesA reader asks: "I keep breaking my own rules after two losses. How do I stop?" This lesson gives you a short written routine that stays the same every day, so your decisions do not depend on how you feel. On a USD/ZAR position of 0.10 lots, one pip is worth about R0.10, so a 50-pip stop is roughly R5.00 before any costs. The routine is what keeps that R5.00 from becoming R500.
5 checks before one USD/ZAR trade
| Step | Amount | Note |
|---|---|---|
| 1. Direction written down | USD/ZAR at 18.4100 | Price quoted from the platform at the time you look |
| 2. Entry and stop distance | 50 pips | Chosen by you before the order, not after |
| 3. Money at risk | R5.00 | 0.10 lots x 50 pips x about R0.10 per pip |
| 4. Account balance | R5,000.00 | Balance shown by your broker |
| 5. Risk as a share of the account | 0.1% | R5.00 divided by R5,000.00, then multiplied by 100 |
Your broker may round the pip value, charge a spread or commission on top, and quote a slightly different USD/ZAR price. These figures vary between brokers, so check your own platform before you trade.
The mistake people make here
The common mistake is to write rules and then rewrite them in the middle of a losing trade, usually by moving the stop further away to avoid taking the loss. That turns a planned R5.00 loss into something much larger, and it happens because the decision is made while the money is moving. Instead, write the five checks before you open the order, and treat the stop as fixed once the order is live. If you feel the urge to move it, close the platform and do the after-session list first.Check yourself
You plan 40 pips on 0.20 lots of USD/ZAR, with one pip worth about R0.10 per 0.10 lots. What is the money at risk?
0.20 lots is twice 0.10 lots, so one pip is about R0.20. 40 pips x R0.20 = R8.00.
Your account is R8,000.00 and you risk R8.00. What share of the account is that?
R8.00 divided by R8,000.00 is 0.001. Multiply by 100 to get 0.1%.
You take three losses of R5.00 in one day. What is the total, and what is it as a share of a R5,000.00 account?
3 x R5.00 = R15.00. R15.00 divided by R5,000.00 is 0.003, or 0.3%.