The chip trick or monopoly money trick gives you more than just a physical representation of your money but also something to stay accountable to as you trade and invest. You are the only one conscious of your trading results, so having a physical representation would be a good idea to help you stay on track. If you live with others, you can lie about your results and refuse to face reality. Still, if you have a physical representation of how well your trading account is performing, then everyone will see and will be able to hold you accountable to it. It will also be self-evident when you start deviating from your money-management plan.
It is quite easy to slip into a streak of losing trades and start trading without discipline when the losses are not visible and are comfortably hidden away in the trading account history of your trading platform, with the option of never looking at them if you opt not to. Using chips or monopoly money, however, stays as a constant reminder of how well you are doing and how much discipline you are exercising. Breaking that discipline brings consequences, which you can see in reality through the chips or monopoly money, reminding you that you lack the discipline to trade successfully.
The major lesson we are considering today is the fact that money management and discipline can be a bit hard to maintain because, as a professional trader and investor, every decision is made on the screen, and the consequences are digital as well. As such, forex, futures, and stock traders start viewing their wins and losses as insignificant and start abusing their trading account.
To assist in dealing with this feeling, it will be helpful to make use of the chips or monopoly money to help quantify your wins or losses in a physical sense. This trick is to help you develop the necessary discipline to succeed as a trader and investor. Once you have successfully developed the habit, you might no longer need the chips.
To make it more effective, you can have a reward-based system for encouraging yourself anytime you follow through with your trading plan. This will make it more exciting and help you build the mental energy required to keep going. Once you have mastered the act of discipline, you are more than halfway through with the process of becoming a consistently profitable trader and investor. All that is left is to combine such discipline with the Supply and Demand trading strategy that we teach in our online trading academy, and you would be fully equipped to start making money work for you.
Risk Disclosure: Trading leveraged products such as CFDs may not be suitable for all investors as they carry a high degree of risk to your investment. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite, and if necessary seek independent advice to fully understand the risk involved, the leveraged nature of CFD trading means that any market movement will have an equally proportional effect on your deposited funds.