What is trading discipline ?

[KDASFTG]

"I find it interesting to read that van Tharp, one Market Wizard, could not cut it in trading.
Why did Schwager no find any person with a psychological training, or anybody who practiced as a psychologist who could trade? Why try to pass a psychologist for a trader when that was not the case?"

Greetings SS,

To my knowledge, Schwager didn't try to pass Van off as a trader. Schwager merely needed someone willing to provide a psychological perspective on the lessons learned from the real Wizards in the book. This person had to be someone who was a trained Psychologist, and also had good experience with trading and the market. And it also needed to be someone who wasn't going to charge for the privilege, because he had to keep his expenses down. At that time, Van was doing extensive writing for TAS&C (Technical Analysis of Stocks & Commodities Magazine) so he fit the bill nicely. Therein lay the reason for his selection.

KDASFTG

 

[drcha]

In my own opinion, to create the discipline to stick with your strategy when things aren't going your way, you need to rigorously test the strategy so that you have a good idea of what to expect. Most people start trading without having a clue as to what to expect. They simply hope that what they are doing will work out.

So true. You must test it yourself, not take anyone's word for it. This is the only way you can believe it. And if you don't believe it, you won't stick with it.

 

[Ferdinand]

To me, discipline in trading is largely patience. You are motivated and you very much want to see that great opportunity, put a large position on, and make money. Of course. But your motivation doesn’t create market opportunity. Market opportunity is external, and you have to wait for it to present itself.

It’s very hard to stay focused and intense and ready to make that big move but then instead do nothing, for hours, or even a day at a time. Normal friends with normal jobs who aren’t interested in trading aren’t going to feel sorry for you when you put in a full day “doing nothing.”

Next time you skip on a trade and it turns out to be lame (would have been a small loss or cost you execution fees), mentally pat yourself on the back and consider the lack of a trade a good trade.

The market doesn’t reward you for not trading, but trading is not only winning, it’s also not losing. It’s not nearly as gratifying but at least try to consider that money not lost is a gain.

Lastly, the really psychological aspect is contentedness. You can’t be hungry or desperate or too wound up. It’s better to trade if you don’t actually need money. Unfortunately few of us have already had trading success to the point where we could really take or leave the next couple weeks with or without income. But that is the mindframe to be in. I don’t know how to bridge that gap. But it’s the spot to be in. You’re willing to put the trade on if the risk/reward is there, but 0 is always fine.

On some level we see the lie; 0 is not fine for long. We need money. But the more you can be fine with 0, the better your trading perspective.

 

[dartmus]

“Discipline means, you have purposefully trained your rational mind, through the rigors of a skill set, to consistently execute a predefined systematic response, when your emotional mind is attempting to compel you into doing something else”.

I gained weight sitting in front of this computer. The process of losing weight became an in depth study of the nature of discipline. I now view issues as opportunities to build character... the most important barrier to success. Drinking lots of water is an opportunity to train another urge. Instead of giving in I learned discipline. My body learned it's not in control. I am. As each day presents challenges... build discipline.