Saturday, 13 June 2015

Discipline in Trading

Discipline is important, especially in volatile markets.  Discipline is not something that you are born with it is something that has to be learned.  Think about a family member or even yourself, are you discipline and they are not or vice versa?  This has nothing to do with DNA.  You either want it or you don’t.  Or in my case, I was forced to have it.
Discipline is like any other habit, you have to build it.  If you don’t use it you lose it.
When a client is having trouble with discipline I ask them why they are trading.  There are three response:  It is fun/exciting, to make money, and the challenge.  If they’re main goal is doing it for fun and excitement than discipline is not required but I explain to them that it will prolong their fun.  If they’re doing it for money than it is necessary to survive the lean times. Discipline makes it possible to learn and adapt.  If you are doing it for the challenge I always go back to the time factor.  If it is worth doing than it is worth doing well.  I equate lack of discipline to wasting their talents and time.
The problem with discipline is that when you need it most it is the furthest thing from your mind.  Discipline doesn’t matter, getting your money back or profits is usually all that can fit into an untrained mind.

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