How To Avoid Mistake "Lack of Discipline" in Trading?
Of the four biggest mistakes in futures trading, a lack of discipline is the most difficult mistake to avoid. The other mistakes detailed in this book can all be dealt with before you start a trading program. You can lay out every step of your trading program down to the last detail. But then you must pull the trigger. That is when Mistake #4 comes into play. As a result, the opportunities to make this mistake are limitless.
A lack of discipline occurs while you are in the line of fire. Picture a new soldier who goes to military school, boot camp and engages in other extensive training. Then suddenly he finds himself in live combat for the first time with somebody shooting real bullets at him. Now consider an individual new to futures trading. He has planned everything and knows exactly what needs to be done in order to ensure his long term survival. Then he suddenly finds himself in a difficult situation, with real money—his money—on the line. How people react in difficult situations cannot be known until that time arrives. Hopefully their planning and preparation will allow them to overcome any psychological obstacles. But you never know for sure how they will react until the moment of truth arrives.
Just telling yourself to put fear and greed and ego aside won't do the trick. You must identify the points within your own trading plan where you will most likely confront these obstacles and make plans to avoid their negative effects. For example, if your approach requires you to interpret chart patterns, you need to define your rules very carefully to remove as much subjectivity as possible. If you do not, you may find yourself interpreting the same pattern differently at times. If your trading has not been going well lately it may be easy to find some perfectly justifiable reason not to take the next trade. Likewise, if you are planning to use mental stops you must prepare yourself to always follow through and to place orders as needed. If you fail to do so, then one bad trade can do you in.
Categories in Trading Mistakes
Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor
Using too much Leverage
Determining the proper capital requirements for trading is a difficult task
Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure
Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader
Useful Advices to Beginning Trader
You can control your success or failure
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