What it Takes to Have Discipline As a Day Trader
Quick Facts
- Most traders in Market Wizards quoted discipline as the most important ingredient of trading
- “The first and the best victory is to conquer self” – Plato
- Without discipline you will not become a successful trader
I’ve been trading for a number of years. I focus on currencies and stocks and have found that it’s very easy to become undisciplined. This can affect you in a number of ways that can really hurt you if you aren’t careful. Sticking to your trading plan, your trading system, your exit strategy, and simply getting up to trade in the morning, all requires discipline. If you get lazy in any department, you can easily lose a lot of money that you worked very hard to make, leading to your confidence and everything you have built up over time to crumble quickly.
Why Discipline is So Hard to Conquer
As Plato said, conquering yourself is the most important victory. We always have two voices in our heads telling us to do two different things. It’s really easy to listen to the side that tells you to take the easy route. 5 more minutes in bed, eat tasty food over healthy, watching the ball game for another 15 minutes before writing an article, making a trade that “looks right” when it doesn’t fit your trading system. Those are some of the comments I hear in my head daily.
Unfortunately, these decisions that we make that are often easy to do aren’t always the right decision and if comes to trading can lead to a disaster. I’ve done it countless times and I most likely will over time but I have learned to limit this costly mistake through mistake. The one we will most often hear is, “Sure the market has fallen by 5% but it might come back tomorrow so I’ll leave it be.” Only to see the market fall another 10% in the next couple days.
How to Have More Discipline
There are varieties of ways that you can build discipline and ultimately you should find the way that works for you best. We all live different lives therefore different things will work for you to conquer discipline.
In terms of working on being more discipline away from trading, you could work on setting small daily goals and work on always completing them. This will give you a sense that you have to do it on time and consistently, leading to more discipline. I spend time everyday meditating for 5-10 minutes. This will calm you down from your busy day and allow you to focus more while building your discipline. You could also go for short walks everyday, which I’m sure your dog would appreciate and it adds a health benefit!
In terms of working on discipline as you trade, you need to create a trading plan and stick to it religiously. Have set times that you wake up and set times for preparing your trading plan for each day. Know the exact reasons why you are placing a trade and the exact reasons for exiting a trade.
These reasons shouldn’t be something like “Because I want to take profits and run!” it needs to be a lot more specific like, “The market has breached a resistance line and starting to weaken while also looking overbought on a couple of my indicators.” Perfect, you know why you’re getting out. I sometimes wait for the market to tell me that I should be considering going in the opposite direction before getting out of a position.
Try Different Exercises Out to See What Works for You
Again, not everything I say here will work for you. Try them out and then try variations out. It takes discipline to start working on building discipline and it also takes discipline to continue working on building discipline. I’m being super redundant but I hope I’m getting my message across.
You can’t just expect to become a disciplined person overnight. It could take weeks, months, and years. It really is a long term project and even if you were to conquer yourself, you’d still have a slip here and there. We’re all humans, but by keeping in mind the importance of discipline and knowing how to conquer it will not only make you a better trader, but also a better person.
Ginza rain photo by plus45 on Flickr.
