Discipline in your trading plan

This question was sent to me from one of our students: “Hey Joe! I know you must get tired of telling us to be disciplined, but discipline seems to be my major problem and from others I’ve contacted it is their major problem as well. So please keep telling us about it and maybe one of these days it will sink in.”

Very well, here we go again. You must have the discipline to carefully plan your trades. You must be disciplined in religiously following the plan you have made for a trade. Once you have closed your position, you should record everything about the trade. Write down where you wanted to enter the trade, what you expected out of the trade, and what you actually did get out of the trade. Make sure to include notes that will help you learn from the trade, stating what actually took place once you entered the trade. Explain why the trade was a winner or a loser. If you keep detailed records, you can learn from past trades and increase your chances of recognizing your strengths and weaknesses. If you stray from what you were doing when you were winning, your records will help you to find your way back. Build on your strengths and stay away from trades in which you have demonstrated weakness.

I know for a fact that my discipline in executing each and every trade according to my trading plan has been the secret to my success. If you want to improve your trading, what you need to do is very simple. Before you enter any trade, think that you will have to explain this trade to the world in a case study format. You have to explain the reason for entry, your risk management guidelines, and why you exited the trade. If you can truly do this, I believe that you can enjoy the same type of success I have enjoyed in this challenge.

 

Joe..

did Discipline help you in anyway in writing books?

 

This question was sent to me from one of my disciples: “Hey Riskmanager! I hear snake oil sellers on internet discussion forums and sometimes even profitable traders repeat again and again that discipline is the key, but unfortunately, most of their seminars/books are shamelessly overpriced. So please keep telling us about some truly good and affordable products and maybe one of these days we will buy it.”

Very well, here we go again.
Let me first thank you so much for this very intelligent question. I'm absolutely sure that a very, very, VERY bright and successful person wrote it.

But let's get back to your original question;
unfortunately, there are many book- and seminar vendors out there using the old sales trick 'high price = good quality', when there are actually many far cheaper products out there offering the same or even superior knowledge and wisdom.

The three books I can therefore recommend you and others most in order to master psychology and one of its derivatives, namely discipline, are "The Psychology of Persuasion" and the books by David S. Nassar, especially "Rules of the Trade" and "Market Evaluation and Analysis for Swing Trading".

 

Absolutely! YES!! When I first began to write in 1988, the only think I had going for me was the discipline I had learned during the many years of trading preceding it. I began writing for purposes of leaving a legacy to my kids. I had come home from a near-death experience and 3 months in a hospital, 2.5 of which were on a ventilator. I was not expected to live. I was too sick to trade, and so I began to write down what became "Trading by the Book."

JR