01 Apr Discipline: Mastering You
• the practice of training people to obey rules or a code of behavior, using punishment to correct disobedience •
The most critical word in a trader’s vernacular. It is a skill, a talent and an asset all in one moment. Few possess the raw form of true discipline and many train with a desire to have more.
I love the topic of discipline, especially in trading. We can all benefit from more discipline and wouldn’t it be wonderful if we could drop in a few quarters at the vending machine and fill up?
There are many, many articles, books – even dissertations written on the subject. I’d like to share three points I have learned that will generally improve the success of a trader.
1. Develop a Process
This includes every motion required to making a productive decision. Become maniacal with your decision making process and refuse anything less.
2. Keep a Record
Keeping a record provides an accurate (if you are honest) point of accountability and will become a valuable tool as you perfect your process. Keep records of the trade mechanics (entry, exit, price, time) but do not neglect the record of thoughts and feelings before, during and after the trade. Tracking yourself is the most reliable method for improvement.
3. Trade the Plan
The plan is a part of the process. Your trading plan is crucial to your success. Examine the plan that is yours and execute the plan to perfection every single trade. Do not change the plan mid-trade. Making adjustments and evaluations is important but not in the middle of a trade.
What tools do you use to increase discipline while trading? Share them on Twitter with @tradeprofessor.