Trading is like a diet; you need discipline in order to be successful. Although this is the last topic I discuss it is probably the cog of the wheel in your journey to proactive trading. Over the years, I’ve seen traders (at least in their mind) come into my office and show me massive losses. Some of the losses could be attributed to not understanding the markets, but a majority of the losses were due to a lack of
discipline.
Being a disciplined trader means following your system and sticking to it no matter what your feelings or thoughts are. If your stop-loss is at 30% and you hit that mark, when you methodically move onto the next trade and visit this loss in a couple of weeks when the emotions are removed. It is when you pull that stop and start looking at the chart for the next level of support that you get in trouble. Soon, that 30% loss is 50% and you are thinking about doubling down to dollar cost average. Before long you have amassed a 75% loss and doubled down. It is at this point that you begin to tell yourself that you will never do it again, hoping that your position will just get to break-even. There are numerous “systems” out there for trading and thousands of traders trade them. Why is it that some of the traders are successful and some fail? Discipline!
Always Remember this Great Quote :Remember, the market is designed to fool most of the people most of the time. Sometimes, the market will go contrary to what speculators have predicted. At these times, speculators must abandon their predictions and follow the action of the market. Never argue with the tape. Markets are never wrong, but opinions often are. I only try to react to what the market is telling me by its behavior.——Jesse Livermore
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