The winning trader is a disciplined trader. Basically, that means outlining a definite trading plan and following it. But people differ in terms of their ability to maintain extreme self-control and discipline. As you may have casually observed, some people are very disciplined while others are sloppy and undisciplined. Neil Simon’s characters Felix Ungar and Oscar Madison, illustrate the stark contrast between the disciplined and undisciplined. Felix was a neat freak who wanted everything in its place, while Oscar was sloppy and more impulsive.
But there were times when Oscar was extremely disciplined. He was a well-known sportswriter, and he must have shown an acceptable amount of self-control in order to put out his column every day. Although he was a fictional character, Oscar shows how it’s possible to be undisciplined in terms of personality traits, yet able to show discipline when completing a specific task, such as executing a trading plan. Let’s consider a few ways that you can maintain self-control and discipline.
Keep in mind that you don’t have to be disciplined all the time. You only need to be disciplined when you are putting on a trade. It sometimes helps to remember this fact. It eases some of the pressure to think that you only need to be focused when you make specific trades, rather than during all waking hours. A second strategy is to outline a very detailed trading plan. You should specify exactly what signals tell you to enter a trade, and what signals tell you to exit. Some traders make the mistake of leaving some of these factors unspecified, figuring they can just “wing it” when the time comes. But this approach presents problems for discipline. When you don’t know what to do specifically, you will be sloppy and less likely to maintain self-control.
It’s also important to make sure your energy level is high, yet your stress level is low. Psychological resources are required to maintain self-control and discipline. When you are tired and worn out, you have little energy left over to focus on managing your trade. To keep your peak performance edge, it’s vital to make sure you are relaxed, rested, and energized. If you aren’t, you’ll tend to make careless mistakes.
Perhaps one of the best ways to maintain self-control is to feel confident as you execute and manage your trade. It’s healthy to be sceptical and overly cautious while planning your trade, but once you have outlined your trading plan, you must execute it with unwavering confidence. You can’t question it. You can’t second-guess your decisions. You must execute your plan as if you are absolutely positive it will succeed. You can mull over its success later after the trade is through. So don’t minimize the importance of self-control and discipline. The more disciplined you can trade, the more profits you’ll realize.