Discipline can be simply defined as your ability to follow your investing trading plan.
Discipline is a rather simple concept. You just need to define what, when and how you want to invest and trade and manage it.
You also need to decide how to handle your account when you are making money and also when bad days come along!
Psychological issues make up 90% of the trading equation. Discipline is the essence of all of the psychological issues.
It permeates throughout the whole process. All the rules and procedures and plans do not matter if they are not followed.
There is little doubt that for those who seek success in trading, failure rarely comes from writing the wrong plan.
It comes from not writing one at all, or not following the one that is written!
Once you make your plan the following three rules are in order:
1. Don’t change your plan during the trading day.
2. Commit to only making changes when the market is closed and
3. Go over your plan every morning before you trade.
The best way to enforce discipline is just by awareness!
Keep records of your trades. On every trade, include an answer to the simple question, “Was this trade part of my trading plan?”. Yes or no. There is no in-between!
Be aware that the undisciplined traders are almost guaranteed failures.
Ask yourself if you are keeping the discipline, or are you just taking random trades that look good at the moment?
You can’t fix something if you do not know it is broken.
You must first be aware that you have a discipline problem!
If you do have the discipline problem, there is an absolute answer for you!
The answer is this:
JUST DISCIPLINE YOURSELF…
There is no other alternative!