Discipline: that elusive thing that seems to escape most of us. We all know it’s what we need to become a profitable trader, yet no matter how hard we try, it always feels just out of reach. This post explores how to become more disciplined. If this sounds interesting to you, please read on.
Why We Need Discipline in Trading:
As traders, we need discipline for the following reasons:
- To do the work to find a strategy that fits you and your lifestyle.
- To back test the strategy to ensure it has an edge.
- To implement and stick to that strategy – writing out a detailed trading plan for each and every trade you take, before you take it – and have the restraint to follow it.
- To build specific routines around your trading.
- To journal and review your trades, then find ways on where and how you can improve.
Without these essentials, you aren’t trading, you’re gambling.
Why is It so Difficult?
Developing discipline is difficult because you have to face the following realities:
- Change: To become more disciplined, you often have to change as a person. This might mean outgrowing certain relationships or social circles that no longer align with your new goals – things you might have to leave behind, which is never easy.
- Old Habits / Routines: Building discipline means replacing “nice” habits and routines with “necessary” ones. It means choosing a 9:00 PM bedtime over a late-night series, or skipping a Friday night out to prep for the coming week. You are essentially trading short-term pleasure for long-term progress.
- Facing discomfort: This ties in with the above. Human beings are biologically wired to seek comfort and shy away from discomfort. Discipline requires you to lean into the uncomfortable.
- Not seeing the forest for the trees: We often lose sight of the big picture. It is very hard to see how a boring, disciplined choice today will impact your life years from now. We are wired for instant gratification.
With the above in mind, let’s look at how to actually build discipline.
How to Build Discipline:
What is the essence of building discipline? It’s in doing what needs to be done, especially when you don’t feel like doing it. It’s found in doing the mundane and “unsexy” tasks. If you can truly internalize this, you are already ahead of 90% of the crowd.
Of course, I know this is easier said then done. Here’s what you do:
- You have to keep asking yourself: “What is more important to me: becoming a successful trader, or the comfort of my current habits?” You cannot have both. You must choose between what is comfortable (sleeping in, binging series, etc.) vs doing what needs to be done (journaling, back testing, etc.). To find comfort in the long-term, you must be willing to embrace discomfort in the short-term.
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We always negotiate with ourselves. You know exactly what you should be doing, but as the time to work approaches, the excuses start. The secret is to track your patterns. If you identify your excuses in advance, they lose their power. And when they come up, you are ready for them – you can make the right choice.
- Except, upfront, that this won’t be easy. But remember, discipline is like a muscle. By doing the work over and over again, you turn your effort into habits… and once you start seeing improved results, you get driven to do even better, adding fuel to the fire.
Finally:
Your priorities will always reflect your progress. If you can prioritize the mundane tasks over what feels good in the short-term, you will find success in the long-term.
Thanks so much for reading. All the best with your trading.
Thanks and Regards,
Trading SOS SOS
