Disciplined Trading

How to Become a Disciplined Trader and its Immense Importance

Question: What are signs of non disciplined traders?

Answer:

  1. Not placing a stop loss
  2. Widening the stop loss if market is near to touch it
  3. Trading everyday without plan
  4. You are inspired to trade whenever you see market screen
  5. Using daily different strategies or emotions based trades, not to stick and correct any specific system
  6. Placing trades because of someone else placed
  7. Closing trades before profit or stop target
  8. Taking too much risks as compared to profits, no balanced ratio in risk/reward
  9. Over trading
  10. Becoming overconfident in case of profitable trading and too much disappointment in case of losses

 Question: Which factors do not allow becoming a disciplined trader?

Answer:

  1. Because you follow your own thoughts and predictions which is uncertain and non verified stuff to operate trading, thoughts and predictions are worst if those are not verified and organized through proper plan and responsible test
  2. Because you do not follow any systematize structured system which addresses all situation and possibilities of trading
  3. Because you do not know real essence and nature of financial markets which can be learnt by many years of useful research in statistical form not by theory form
  4. People have natural psychology of greed, quick, and easy approach of money making which is unrealistic and ultimately causes bigger losses while in disciplined trading there are well defined rules free from predictions, assumptions, greed, etc
  5. Some people have personal emotional weaknesses

 Question: What you should keep in mind to become a disciplined trader?

Answer:

  1. Keep the end in mind and be well prepared for all situations and get ready all those tools to encounter all good and bad stages of trading. This is only possible when you have fixed logic plan with 10 or more years of its comprehensive verification
  2. Keep in mind that what you are going to do is already defined and rules based approach, this is only possible when you have obvious determined trading system with mathematical realities
  3. Don’t be fear about losses because they happen and nobody can avoid it but you must have complete knowledge about worst stage and average stage of losses. This is only possible when you have examined different levels of risk in last many years of trading and its successful management skills
  4. Keep in mind that if you will not follow rules based strategy then you will made nothing even you may face expensive heavily losses because you are following something simply uncertain, undefined and unclear without any background and references. To do so you must have certain mathematical context based verified strategy over 10-15 years to get that level of confidence

Conclusive Summary: one cannot become a disciplined trader until he/she has well verified fixed logic strategy with full track records of losses and profits and its proven management under all scenarios to remain confident, disciplined and logically motivated (not emotionally)