Since discipline is the most challenging facet of trading what can a trader do to improve in this area? For starters, ask yourself how disciplined you are in your personal life. Do you usually accomplish want you set out to do? Are you a good planner, and organized when it comes to achieving a task? Do you push yourself outside of your comfort zone, or do find it hard to move away from your “safe Zone?” If you answered yes to all these questions then you’ll do better than most in the trading arena. If, however, you’re perfectly honest with yourself and find that you’re lacking in these areas there is some work to do.
Following rules does not come easily to most of us, that’s why we have rules imposed on us in every aspect of our lives. Politicians often have to write new laws to protect us against ourselves, usually after something bad happens. The penalties for transgressing can be stiff depending upon the severity of transgression. This also holds true for trading, doesn’t it?
So for those of us that need some help with discipline one recommendation is to start a workout regime. In the Trade plan classes that I teach, I actually have students incorporate some type of workout routine into their daily trading plan. In case you haven’t figured it out yet, trading is largely an exercise in mental exertion and as such without a health body the mind will not function properly.
Studies have shown that regular exercise improves mental acuity, and gives people who routinely workout a positive outlook when faced with adversity. Do you think as a trader you will face some adversity? Of course this is a rhetorical question, but you get the point.
For those that think this doesn’t apply to you because you’re already thin or already routinely exercise, think again. If you’re currently running 2 miles then how about 3 or 4? If you workout 3 days a week how about 4? The point is that to get better , we need to stretch our boundaries, face our fears and conquer them.
With the New Year just around the corner now is as good a time as ever to start making those changes that will improve your trading results. One of those is to improve the way you handle the challenge of sticking to your rules, having a clear, concise plan will help in that area. Starting a workout regime can also help with discipline . So start making small positive changes in every aspect of your life and perhaps next year you’ll have the best trading results ever!
I hope everyone has a great Holiday!
Written by Gabe Velazquez, Online Trading Academy Instructor. Gabe got his start in the markets as a broker trainee for Paine Webber, a mere 3 months before the market crash of 1987. He witnessed the gut wrenching fear of investors during that time period and the wild speculative euphoria of the late 90’s. That experience brought to light the importance risk management plays in trading and investing. In fact, it’s greatly influenced the way he trades today. He spent 15 years as a stock and commodities broker, conducting technical analysis seminars through-out Southern California. After many years of managing other people’s money, Gabe now concentrates full time on trading his own portfolio and teaching. Students will benefit from his first hand experience of daily involvement in the market. He brings with him an acute awareness and understanding of how the markets really work. Articulating this knowledge clearly, succinctly, and with enthusiasm is something students can appreciate. This gift for communicating was honed through many years of public speaking.