When it comes to trading the financial markets every single trader will tell you that to be successful in this field you need to be determined and have rock solid discipline. But what does it really mean to be determined and well disciplined? Its actually not that hard if you break it down to a simple day to day routine.
Failing to Plan is Planning to Fail
You need to be well prepared if you seek to achieve anything on your own. If you have planned in advance for all scenarios that the market can throw at you determination and discipline will simply come from your ability to stick to your predefined rules. Every trading plan consists of a goal and a path to get there. Your job as a trader is to find out what could put you out of this path and keep you from reaching that goal. Once you identify obvious and potential resistances to your plan you start preparing to eliminate them when and if they appear.
Each trading day starts with a quiz
You need to ask yourself several very important questions before your place your first trade for the day.
How do I feel today and am I in the right state of mind to manage risk and deploy capital?
It seems obvious but if you feel sick or have other things troubling you it is best to take the day off or you risk to make mistakes that you would later need to recover from. Remember: a day of no losses is a winning day! Protect your capital at all costs. It is the single most important thing in your trading career.
If the answer to the first question is YES then you may proceed to ask yourself:
What are the hot topics and how do they relate to the markets I trade?
What is the predominant sentiment at the moment for the markets I trade – bullish, bearish or neutral?
What scheduled news reports and events are there during the trading day?
Those are just questions that will force you to prepare for what the day may bring. If you are a longer term trader those questions would simply match a larger perspective.
Each trading day ends with a quiz too
Your trading day should not end with the closing of your last trade. It should end when you have also assessed the trading day and how you performed as a trader. Both positive and negative results must be seriously evaluated. If you made some bad decisions you need to get a deeper understanding of the root cause of your actions.
Was it you not being focused enough that caused a losing trade or was it a justified loss that has to be accepted as part of the game?
All traders know by instinct when they have under performed and have not executed their trading plan as they should have. The difference is that successful traders stay aware of their ego trying to justify bad performance and blame it on outside circumstances. They look beyond that initial emotional response. Good traders constantly evaluate their trading results and try to repeat trades that have worked before while avoiding ideas that have lost money in the past.
You need to be your own boss
Trading offers an opportunity to achieve real independence but the trick is that you would need to be extremely disciplined and resistant to distractions. Just like your boss probably.
Mind your own business and do your homework. That’s all that matters. Learn to focus your attention to what needs to be done and try to keep your attention away from things that call for it unnecessarily.
Wishing your successful trading!
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