You need to understand that no amount of goals setting without discipline can lead to success. You cannot succeed in trading without discipline. No one can succeed in any business let alone trading without absolute discipline. Discipline is the bedrock of successful traders. It’s the discipline that separate human accomplishment from human failure, successful traders from unsuccessful traders, winning trades from losing trades. It allows you to stay glue with your goal and desire. I really believe you and I cannot be exceptionally happy without discipline, in the same way we cannot be exceptionally organized, wealthy, and intelligent without any form of discipline. In my own views and few traders I have interviewed, trading system is rated far below discipline and money management in the ladder of success in trading business. The best place to meet people of great achievers, investors, traders, writers, lovers, fathers, etc is the club of discipline. It’s the only parameter that separates you from million traders. A discipline person knows he must be willing to dedicate 100% of his time and other resources to the success of a chosen profession. No matter what it takes, he’s willing to endure. The ability to execute each trade as planned is discipline. When you follow through your trading system and plans, you exercise good discipline. The trading system may be well back-tested and reliable, its discipline that will makes it work and effective. No system can be 100% accurate and generate 100% winning trades at all time thus during the drawdown, its discipline that will make you take the loser quickly and move to next trade, stick to the system as long as you believe in workability and reliability that in the long run it will generate profits. The discipline of the trader manifests in his decision taking. When you are trading, always remind yourself that discipline in terms of acceptance of the outcome of the result in whichever way is taking responsibility. You must accept the risk before you open any position. Trading should be treated like a business, uplifting yourself from realm of unconscious state of emotional and rational incompetence to mental and emotional state of competence is as result of proper preparation and discipline. When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then for that is just the place and time that the tide will turn says Harriet Beecher Stowe. My experience has really helped to make simple classification of discipline in trading. Emotional, System and Professional Discipline. A trader may not be perfect in all but should strive to improve every day.
I have read books upon books about how to remove emotion from trading yet I have not seen anyone who has successfully removed emotion from trading. I have only seen people who are aware of their emotion. You cannot totally remove emotion from trading – never. But since you understand now that your self-awareness is the most important discipline factor, you can use any level of your emotion to your advantage (conscious and unconscious). There is logical distinction between being aware of feelings and acting to change. The emotion authors, writers, and other traders are trying to explain is the unconscious emotion. These two emotions need not be generalized as emotion cannot be totally eradicated in trading. The way to work it out is through discipline and understanding by bringing the unstable unconscious emotion to stability. The moment emotion comes into awareness, evaluation set in.
From psychological point of view it’s understood that unconscious action is brought into awareness, it registers in the cortex and the cortex can evaluate things anew, decide to change the outlook. Feeling (emotion) is part of decision making, analyzing it makes it rational. Traders more often than not are deceived by price actions of the market by the force of buyers and sellers who try hard to push the price action to their desirable position. The price might not be true value of a particular underlying instrument but the force of emotions by buyers and sellers at that particular time caused it. Since trading the markets are zero-sum transactions it is not mathematically possible to ever know with certainty that any trade assumption or guessing will be right except later after the position has been opened. However as price discounts the true state of the market at any particular time, a trader should understand levitra orosolubile that the price is there because that’s where it should be and it’s caused by the force of demand and supply. So if you as a trader feel indifference about the current price, the ability to remain in stillness and calmness position in spite of the price action movement without force of emotion to take unjustified trades is what I refer as Emotional Discipline. You must at some point in the market ‘Stand down’. Do nothing other than watching the force of other buyers and sellers in the market. When you are emotionally disciplined you will stay with the principle of stillness, calmness and avoid chaos caused by other traders especially when you cannot digest element of understanding in prevailing market direction. Remember we fear what we don’t understand.
No one knows all. Nobody has all the answers. Knowing that you do not know anything is far wiser than thinking that you know a lot when you really don’t. A professional trader knows what he doesn’t know, his weakness and make up for it. This ability of a trader to know what he doesn’t know and discipline himself to seek knowledge and education for improvement in order to be a better trader not minding the cost is what I called Professional Discipline. It’s a known fact that only 3% of readers read a whole book starting from chapter one. Same goes to what is being learnt or taught. The only 3% traders who strive for improvement everyday reach the professional level. To reach professional level education is the key and the only way. Nothing happens until it is discipline. Indiscipline vision is a chatter vision, indiscipline traders are failed traders. Professional discipline begins with your mind. You have to unclutter your mind from prejudices effect of the market. Direct your focus and attitude on the main thing that is happening not what you think should happen in the market. Strive to be a better trader, work on yourself and attitude.
The common saying by traders and analysts is Plan your trade and trade your plan, yet only few traders stick to this simple rule. The premise of system discipline is your ability to discipline yourself to trade your system, accept the risk and outcome of your trades, win or loss after you have tested the system. The best trading system often seems idiotically simple to some traders who are unaccustomed to this sort of trading. It’s the system discipline that espouses your edge after considering available mathematical facts and variables and emotional detachment from the market. Perhaps in the world of trading, no matter how discipline you are, you will experience losers. Your system will fail to generate profit. This is not new; all trading system has drawdown time. Accept and improve on it. Remember failing or losing trade is a step closer to a winning trade. Be strategically discipline and know when things are not working, thus stop. I am no better in this regards or victim of any of the discipline like other behavioral patterns of market participants. Be a wise trader who learns from mistakes of others.