Winning traders are disciplined. They control their impulses and feelings, and this allows them to execute a trading strategy effortlessly and flawlessly. The disciplined trader is decisive. The undisciplined trader, in contrast, wavers. He or she may stick with a trading plan occasionally while going a different way at other times. Discipline is indeed a key ingredient to success, but not everyone has a high level of self-discipline. It’s worth determining where you stand on this trait and, if you lack discipline and self-control, work to build it up.
Discipline and self-control are well-studied personality traits. Some people are highly disciplined and very self-controlled. They scrupulously follow rules and are careful to control their impulses. You know the type; they pay off their credit cards every month, are never late for an appointment, and carefully plan every detail of their lives. Although these characteristics may be ideal for trading, there’s a downside: Such people tend to have trouble taking risks. They prefer a sure thing, and trading outcomes are rarely sure things. Traders tend to prefer living a little on the wild side.
They may not recklessly seek out risk, but they don’t mind it. Relatively speaking, they tend to lack discipline and control. Perhaps that’s why so many trading books and coaches find it necessary to preach the virtues of self-control. How are your discipline and self-control? Do you have trouble sticking to your trading plan? Do you long for more discipline and self-control when it comes to your trading? If you have trouble with discipline, you may want to try a stimulating exercise to increase your awareness: Observe your level of self-control in your everyday life and try to gain more control.
How much discipline and self-control do you practice in your everyday life? Are you late for appointments? Do you spend more money each month than your budget allows? Do you frequently find yourself breaking promises? It’s not necessarily the case that a disciplined trader is disciplined in all aspects of one’s life, but it helps. The life strategies we use in everyday life may bleed over into our trading life. If you often overspend, overeat, or have an unrestrained need for pleasure, you may find maintaining self-control and discipline while trading a little more difficult than others.
So try this exercise: spend a few weeks trying to control as much of your life as possible. Pick specific areas where you can gain more self-control. Control your caloric intake, the money you spend, and time spent in leisure activities. See how well you do. It may change your reference point. You may soon discover that you rarely control your impulses, and can do much better. And this, in turn, may positively influence your ability to stick with your trading plan. It’s worth trying. Discipline is the key to trading success, and it’s vital that we do everything we can to increase it.
