Discipline is being
responsible to do WHAT you are supposed to do, WHEN you are supposed to do it, and HOW you are supposed to do it regardless of how you "feel" about it. It generally involves paying "close attention to detail..mindfulness..concentration and focus. In the trading world it also involves the element of flexibility. You have to "bend" yourself mentally to adapt to what the market is doing and not fight the market. This can involve actually moving a stop when you suddenly "see" something about the markets that you did not see at the time you placed your stop. It does not mean blindly following your rules for trading but is DOES MEAN vigorously following the market. Hopefully, one has crafted a set of rules that can "flex" with what the market is doing. The market knows nothing of your rules nor does it care in the least about your strategies or tactics. Nor does it care anything about any lines you may draw on your charts..horizontal..vertical..sloped or whatever. These only serve as indications of present market pressures and as mechanisms for a trader to read the market pressures and to clarify those market pressures TO HIMSELF. This is useful simply because of the inertia or tendency of the markets to keep doing "at least for a while" what it is presently doing. This inertia can be capitalized upon. But at ANY moment..in any way..the pressures can change for reasons unknown and perhaps even unknowable reasons, for say, an individual trader. If your plan doesn't have an element of flexibility built into it then the market will leave you standing in the dust waiting to get in the market or leave you picking up your coins that are left after obliterating your stop loss.
A traders basic job is to ANTICIPATE but FOLLOW price action as the market unfolds. The rules you craft and how you go about doing that is your trading plan. Hopefully, you have flexibility built into your plan because uncertainty has always been, and will always be, a strong element of the markets. Rules and plans can help us deal with that uncertainty but but flexibility must be injected into ones trading strategies. The market can bend in all sort of directions and at various speeds much like a cane driven by the wind. However, that said, even the cane has it limits as to how far the cane can bend. And a north wind will bend the cane in a generally certain direction (hint pressure slow or increasing). A whipping wind will twist it in all sorts of directions (hint choppy). A driving wind will strongly bend it in a direction (hint strong breakouts)
Since the market doesn't know anything of your well crafted plans and rules and nor does it care (of course there are some exceptions....e.g. stop running..etc) in general, price is simply gonna go where it is gonna go. It can go up by buying pressure (frenzy buying..institutions filling orders..algos executing.,) or by sellers simply backing off thus creating a form of buying pressure. That is to say, sellers are saying, if you want this, you gonna have to come up to my price. Buyers can create buying pressure. Sellers can also. Selling pressure can be created by shorting or simply by buyers backing off.
Discipline with flexibility is key. It takes time and experience and practice to develop such a plan that incorporates those two things. How do you follow your rules yet remain flexible enough to follow the market when the market action obliterates your trading strategy?
Will you have the discipline to follow your plan..strategies..rules..yet maintain a greater discipline to follow what the markets are actually doing, regardless of your plan may be?
Discipline is the execution of your plan in the uncertainty of the market price action environment while at the same time executing according present market action.
I will give an example. I trade off of patterns. I know it is fossilized, out of style, and considered by many to be old school stuff that just doesn't work. Well ..at least they couldn't get it to work ..threw their hands up..and declared it as a bunch of mumbo jumbo. Market surfer derided it (in a jokingly way
) while i argued for it on his thread regarding price drivers and beating the machines. Price action obliterated his theories and probally hindered the sell of his book. He finally left the forum and we have not seen hide nor hair of him since. ...now..back to my example as i got off course here as the memories of that thread again filled my aging brain. I know it is aging because the cat scan indicated that. At least they found a brain there!
EXAMPLE: Take wedge tops. I have rules..tactics..and strategies for trading wedge tops. Generally i look to short them at certain precise moments. However, i have seen them fail almost as much as they succeed. There is a slight edge that they will succeed in producing an profitible short but I understand that they can fail too. There is probally around a 35% to 40% chance that any shorting of a wedge top will indeed fail. So, if i shorted a wedge top and i see it fail or I see it is probally going to fail after i have shorted it then i will exit my position and look to take a long position on a failed wedge top short. Why? Because I know that the odds favor two legs up on a FAILED wedge top. This is an example of flexibilty and discipline to follow, above all, what the market is actually doing. Why should I wait for my stop to be hit when it is clear from unfolding PA that the wedge top is most likely going to fail. So, therefore, i try to anticipate market action by shorting a wedge top at a given monent according to my rules but IF it fails i will bend and go with the market. It does NOT mean wedge tops are a scumbag way of trading. They do in fact succeed, as shorting opportunities, slightly more than they do not.
Wedge bottoms. I have my rules. But i go with the market. See example pic. Go long on wedge bottoms but if they fail short them. Even short successive wedge bottoms until they stop failing. You get the main idea? Follow your strategy but more important be disciplined to follow the market. After all, that is all that matters. The coins that jingle in your picket are indicative of your discipline (or lack of your discipline) to follow the market. WINNING IS EVERYTHING. In football and in trading. Who wants to break even in the markets or simply tie a game or just play only for the experience of it. My granddaughter one year play baseball at school. One day they lost. As she was telling me the story of the losing game she said it did not matter that what was important was the "experience" of playing. I immediately told her no! No! NO! Winning the game is everything! Thus goes trading. Watch the video on this thread posted by southhall. Make sure you win overall or at least stay in the game if a losing streak hits you. ABOVE ALL FOLLOW THE MARKET NOT WHAT YOU THINK THE MARKET SHOULD DO.
Flexibilty..discipline..execution. Discipline to execute according to plan but flexible to execute and follow the market. Perhaps a few pictures will clarify or muddify?? ROFLMAO
P.S. beating the machines does not work. Anticipating and trading PA does if you understand how, and practice enough, and are able to be disciplined to follow your plan and actual PA.
