How much discipline do I need to be a successful trader?

A lot, and here’s why.

No one ever said that conquering the markets was easy. But being successful definitely isn’t impossible. It just takes a lot of hard work and even more discipline, no matter how much natural ability you have.

The problem is, to practice your craft, you’ve got to actually get in there and play the market. And that means exposing yourself to a whole bunch of psychological obstacles you’ll need to be able to deal with effectively—pressure, fear, anger, uncertainty, etc.—if you want to come out on top.

The best way to do that?

Be disciplined, not impulsive.

Emotions are your enemy

When you step out onto the virtual trading floor, you’re stepping into a bubbling cauldron. Expectations are always high. Energy is high. The stakes are high too, because even if we don’t win as often as we hope to, the chance is always there.

Add a dash of hope (when the trading is going right) and anger (when you’re having a bad day), and maybe even greed (come on, be honest), and you have the recipe for an average trading day.

Does all of that influence market conditions? You bet. More than a showdown between the Donald and the People’s Republic of China.

When you step out onto the virtual trading floor, you’re stepping into a bubbling cauldron.

And you can bet that you’ll get emotional too. Even the best of us are guilty of getting angry or afraid from time to time, especially when we’re  new to this game. When you see the market moving, you want a piece of the action. That’s natural. The problem is, if you don’t have a plan to keep your instincts in check, you’re in big trouble.

Your trading plan is your best friend

We’ve all heard it hundreds of times: “the trend is your friend”. Now it’s time to meet your new best friend: your trading plan, aka your strategy, or, if you’re algotrading fanatics like we are, your algos.

“Wait,” we can hear you saying, “I’m not a business. Why do I need a plan?”

Even the best of us are guilty of getting angry or afraid from time to time, especially when we’re new to this game.

Do you make money from your trades? Do you hope to continue doing it and get even better? Then get into the right mindset. You’re a business.

And just like a business, you shouldn’t be risking the money you make from your sweat and talent by throwing it in whatever direction you feel like on any given day, without a roadmap for where you want to be a month or a year down the line or the control to get there.

Make a trading plan and stick to it.

With a trading plan, you’ll always be consistent with the important stuff. Like making sure you don’t overshoot your margins, run wild with your risk, or make up your drawdowns as you go along (and wipe out your entire account.)

Even better, once you take the leap and start setting up strategies with smart algotrading software like Tekton, you won’t even have to worry about sticking to your plan. Your algos will stick to it for you.

Being in control. Being consistent. Knowing what you want and how to get it. That’s how you build real trading success.

Or, hey, you can just stay angry and scared and follow the market wherever it goes, losing money and not knowing why.

Your choice.

Related Articles

Afraid of impulse trading? You should be

Not only does trading discipline keep you from doing stupid (i.e. greedy, angry, reckless) things, being consistent with your strategies also teaches you a lot about how the market works. And that’s how you build up the confidence you need to make a business out of trading.

So, discipline, good. Gut instincts, bad.
The problem is, to practice your craft, you’ve got to actually get in there and play the market. And that means exposing yourself to a whole bunch of psychological obstacles you’ll need to be able to deal with effectively—pressure, fear, anger, uncertainty, etc.—if you want to come out on top.

Want real discipline? Start algotrading.

It’s true. The best traders stay disciplined by sticking to their trading plans.

Trading by plan lets you know when to get into a trade and when to get out. (It isn’t an angel’s voice whispering in your ear every time you’re about to get greedy, friends. It’s the plan.)

If you’ve got a plan, it’s easier to stay objective and avoid revenge trading if things go south, as they will from time to time. And you’ll keep your mind focused and decluttered. No emotion allowed when you’re trading, remember? (Unless you’ve just won a trade and it’s party time.)
So, discipline, good. Gut instincts, bad.
The problem is, to practice your craft, you’ve got to actually get in there and play the market. And that means exposing yourself to a whole bunch of psychological obstacles you’ll need to be able to deal with effectively—pressure, fear, anger, uncertainty, etc.—if you want to come out on top.

Is the trend your friend?

No doubt you have heard that at some point in your trading carer or from others who trade, so we thought it would be appropriate for us to take a closer look at this saying and see if it really holds up.

Even though a lot of trading educators and ‘gurus’ tell you to trade with the Trend, they never clearly define a Trend.
OK then, What is a Trend? Well, let’s keep it short and sweet

The Zen of Algotrading

One thing we can’t stand over here at Tekton is to see our fellow traders making their lives more complicated than they have to be. Which is why we algo-gurus decided to put our heads together and share a few solid rules of thumb we all live by when we set out each day for righteous battle.

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