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How Lack of Trading Discipline is Killing Your Performance and the Steps You Can Take to Improve It

 

This article on Trading Discipline is the opinion of Optimus Futures.

Imagine, if you will, two traders. One trader holds a superior trading strategy and ample capital resources to make it work. But he lacks discipline. The other trader has a mediocre system, fewer capital resources, but superior trading discipline. The non-disciplined trader has everything going for him, except for himself; whereas the disciplined trader has a few things working against him, but his ability to remain disciplined serves as his core strength.

Who might end up becoming the more successful trader? The answer is that it all depends on a few other things: the ability to adapt to situations, the smarts to assess what’s working and what’s not, and the “discipline”

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Are you compatible with your trading strategy?

 

Traders don’t usually spend enough time and effort choosing a trading methodology that supports their strengths and circumvents their weaknesses. The “one size fits all” claims such as “trend following is the easiest trading method” or “trading higher time frames are more reliable” don’t always work in trading. The incompatibility of a trader with a predetermined trading method without taking their own personality into consideration can lead to a variety of problems.

 

How carefully did you choose your trading method?

Ask yourself: how did you find your current trading method? Most traders usually either stumble over a trading method, read astonishing claims in trading forums or blindly follow suggestions of random people on social media. Very few will actually take the time and audit themselves to get an idea of what works for them and then choose their trading method accordingly.

Are you patient? Can you focus for a long period of time

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Why hindsight trading is so easy compared to real-time trading

 

hindsight trading

Trading is always so “obvious” after the fact. Why?

Hindsight makes everything seem so easy and obvious, but why is that? The problem is the trader itself. Just think about how you analyze your charts with the benefits of hindsight. If you are like most traders, you look left and then pick trading tools and indicators to see which one would have predicted the outcome correctly.

Traders can choose from so many trading tools that at any given moment, you will always be able to find many reasonable explanations why you should have entered at a particular price level.

Ask yourself another question. How often do you look for past price action and try to find losing trades? Almost no one ever tries to find losing trades or times when tools wouldn’t have worked. This creates a very biased view. Consider looking for

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It is okay to change your mind frequently when you trade

 

Flexibility as a Trader Is Key

Do you have days when you sit down at your trading desk in the morning, open your platform and know exactly which direction the market is going? But those days are typically the ones where you lose the most money, right? There is a big difference between having a feeling for where the market will go and actually trading and executing your trades. You will notice that the best traders have strong opinions about the markets but, at the same time, they are just as fast at throwing their opinions over board and going the opposite direction.

The most important change in my trading career occurred when I learned to divorce my ego from the trade. Trading is a psychological game. Most people think that they’re playing against the market, but the market doesn’t care. You’re really playing against yourself.

– Marty Schwartz

 Ego vs. opinion

Understanding the difference

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