Winning traders are disciplined. Does this mean that they never “slip” while trying to follow a trading plan? Not necessarily. It’s hard to maintain discipline, and you’re human. No human is perfect. You should expect to abandon your plan occasionally or make an impulsive trade based on a whim once in a while. In many ways, it isn’t the slip that is the problem but how you recover from it.


Many people take an Alcoholics Anonymous approach to discipline. They assume that there are “disciplined traders” on the one hand and “gamblers” on the other. And if you are a “gambler,” then you will always be a gambler. The fact is, however, discipline is not an all-or-none characteristic. Everyone may have a proneness toward gambling, but on the other hand, everyone can learn to trade with discipline. When you put pressure on yourself to remain disciplined all the time, however, you end up feeling guilty.

You feel that you must trade with discipline all the time, and when you slip, you should punish yourself for “breaking the rules.” Guilt doesn’t help. When you feel guilty, you are distracted. You no longer take an active, problem-solving approach to trade, but mull over what you did wrong. If you ease your standards and let yourself feel that you can make a mistake occasionally, you will feel less guilty. And approach the markets more calmly and creatively.

The other problem with the “all or none” approach to thinking about discipline is that you may start believing that you are a pathological gambler when you abandon your plan. You may stereotype yourself and start acting as if you are a gambler because you wrongly believe you that you are; it becomes a self-fulfilling prophecy. If you believe you are a gambler you’ll start acting like one.

Your thoughts will align with your view of yourself. You’ll start thinking, “Of course I abandoned my plan, I have no self-control because I lack the inherent ability for self-control.” Self-views are powerful. If you start believing that you can’t maintain discipline, then you won’t be able to. That said, merely believing that you can easily maintain discipline won’t allow you to have an unfailing ability to stick with your trading plan, but it will set you on the right path. At least you won’t be underestimating your ability to maintain discipline.

Although some people are naturally impulsive, most people can learn to trade with discipline. It is just a matter of gaining experience following your plan. The more experience you have developing a trading plan and following it, the more you’ll be able to actually follow it time and time again. But don’t make matters harder on yourself by underestimating your skills. Sure, you’ll make a few impulsive trades at first, but these slips don’t mean that you can’t be a disciplined trader with practice.

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