What do u do to stick to your rules?

<h3>Day of Stop Losses</h3>
Today is another historic day in the making. I can't stress enough the importance of a stop loss. Today is the perfect example. Four of my five stop losses kicked in today. YES! I did leave some money on the table. But I think I have dogged a huge downside and locked in decent profits. Amounts where my stop losses kicked in today.
<ul>
<li><strong>DTO 234.02</strong></li>
<li><strong>SCO 53.68</strong></li>
<li><strong>SLV 13.82</strong></li>
<li><strong>DEE 95.76</strong></li>
</ul>
My portfolio seems to good to be true. But it is real and simple, check the history I have been making posts before time.<br />
<span style="font-family:Bookman Old Style;"> Here is the live <a href="http://investics.wordpress.com/etf-performance/">portfolio.</a></span><br />
<span style="font-family:Bookman Old Style;"> You can find all historic posts <a href="http://investics.wordpress.com/category/etf-ranking/"> here.</a></span>

 

The rules are the RULES! End of story!

 

From my experience: after loosing a lot of money, a lot of time and get very frustrated, the only option remained was to respect my rules.

 

I have all my rules writen down and I hate breaking my own rules.


hmm. I broke several today (2 rules on one trade)

counting out loud

1. played wrong side of opg
2. was down so slowed down my trading
3. listened to a guru on a trade
4. emotional and went on tilt as an earlier trade killed me

I feel I need to get a bolt of electric shock when I screw up or do some push ups etc

 

Cut off a finger each time breaking a rule costs you money. You will either quit breaking rules or quit trading.

 

I only have about two rules now... sung to the tune of "I'm in with the in crowd"

I'm short in a downtrend
I go where the big money goes
I'm long in an uptrend
I know where it's going but not where it will end

 

Innovest 11,

As others have said, you either have discipline or you don’t. You either have an edge or you don’t. If you do, then you know the math is on your side if you follow your rules. If you have an edge, know the math and still won't follow your rules, you are a gambler who puts action about profitability and will lose. As Dustin said in another thread, over many thousands of trades, each individual trade is insignificant and shouldn't make you excitable up or down as it just doesn't matter. If you don’t have an edge and just trade for thrills, you are doomed to fail, either quickly or slowly. Do you have discipline is other areas of your life? Because if you have lax discipline in other areas of your life, it is pretty optimistic and somewhat naïve to think that you will suddenly be disciplined in your trading.

I agree with the person who said your most important priority is to follow your rules without exception. When you periodically evaluate your rules (and have data backing up your assertions), you can change your rules as needed.

Having said that, I remember reading in a trading book about psychology (I don’t remember the author or would credit him) about how the author ran into a former client and how this client said he was doing great now. The author asked why? The trader said he assumed the owner of the money he was trading was gone except for a yearly review. In the yearly review, the trader was compensated not by his profits or loses, but by how faithfully he followed his system. Excellent advice. Think of yourself as an employee of the money and your job is to follow the rules and you are compensated based on this fact only. Of course this is predicated on the fact that you actually have a system of rules, a trading plan to follow and an edge.

If you don’t have these things, good discipline will only keep you in the game longer as you are just bleeding more slowly due to your discipline. If you are really lucky you MAY discover an edge while bleeding slowly. But probably not. I hope the above analogy helps.

Good trading

BM

 

Disipline is 1
Having a set of do's and don'ts is 2

 

Psychologically telling myself what my best months "can be", and keeping tabs on what my worst months are. If you have large up months compared to small down months, it will be easier to pull the trigger going forward. At least, this is what I always tell myself after a loss. Albeit, my losses are quite small percentage wise to my wins, but that's just part of having an edge.

 

Trying to to impose discipline on yourself is futile. I tried it for a long time, it just doesn't work. Every time I put on a trade, I violated one or two rules. If I don't put on a trade, I violate one of the rules.

Discipline is imposed from outside. I am thinking of a prop firm in which several traders trade in the same room. If you don't want to look stupid at the end of the day, you may try to follow the rules.

Think about it, if other traders in the same room make money, while you lose money because of violating the rules, you may try to establish some discipline. Hypothetically, if you trade with Red_Ink in the same room, at the end of the day, he posted a profit of $50,000, what effect would that have on you, espeically when you were violating your rules and wasted your money and time?

In my case, I have never seen a trader in my whole life. I wish I had a chance to watch other traders trade, to watch other traders sweat in front of their monitors. I will be happy to accept any invitation from any trader to watch him trade. I am not interested in their trading methods, I have my own method, I just cannot follow the method.