IN PRAISE OF THE DISCIPLINED TRADER
“You must win the battle within yourself first, before you can win with the markets… Remember the key is to always exercise mental discipline when applying these structural tips. A successful trader is in control of his/her emotions at all times and is not controlled by fear. Know that the market is a math game. It’s an exercise in probability and statistics and you must keep the odds on your side, even if, from time to time, it hurts.” – Norman Hallett
For the disciplined trader, there are no flops, only experiences. There are beneficial lessons you can learn when trading becomes tough. The loss is one of the factors that help awaken the trading genius in the trader. In trading, there’s a solution to each challenge. Innovation is what follows when faced with a new challenge, plus the trader can often experiment with different trading ideas and stick to what works. What is known is useless unless it’s applied. Knowledge is power only when it’s applied. The disciplined trader knows that the right mindset and risk control are essentials for a trading strategy to be used effectively.
The exemplary trader doesn’t talk of quitting trading because of transitory losses. She/he knows that profits will soon show up. For the trader, trading is a passion of a lifetime. John Carter says: “Honestly I cannot [stop trading]. Everyday is different. It’s mentally stimulating. I like to have breaks form time to time where I don’t trade for a couple of weeks, but I can imagine looking at the markets right up until the end.”
All the disciplined trader needs to know is embedded in her/his mind or at their disposal. She/he knows that if some good trade setups are missed, with patience, there’ll soon be new setups. There’s no need to be trading always or everyday; trading is done only when certain criteria are met. The trader thinks of the extra time she/he has. You can trade and still have a life! When new positions are opened, the markets are allowed to play themselves out. The exemplary trader uses stops to truncate losses, and give profits sufficient leeway. Who knows whether a trade that has gone positive by 120 pips would still go positive by 200 pips or more? Moreover, each market movement will favor some traders and disfavor some traders. The market makers and other traders are only human, just like the exemplary trader. By using positive expectancy systems, the trader can be triumphant with 50% probability.
A rookie may first be disappointed by the fact that there’s no magical strategy, but this fact can change forever their attitude to trading. She/he may then decide to know how successful traders manage to move ahead without the fictitious Holy Grail. These secrets have been mentioned tirelessly in my articles. I admire the strength of character that I observe in traders who can still smile and laugh in spite of occasional losses. Have you ever been in a situation in which you felt troubled and disappointed in trading? Even while you were undergoing this tough time, the experience might be helping you to become a better trader in future.
You have only 2 choices: Forge ahead on your way to success, or turn to hopelessness and go do something else.
In Praise of the Disciplined Trader
You have laid your rules on the battleground,
You gather gains effortlessly,
You are a veteran who does not waver
That to win is to survive;
The loss and profit are the same
To you when the trade must be executed;
Yours are the wits that scan the markets:
The chance is come again!
Prove to them if you are still the pro
That you have always been!
I conclude this article with quotes from Dr. Van K. Tharp
1. “I learned that successful traders possess certain qualities and thought processes that enable them to produce outstanding results.”
2. “I believe that every person produces the results he or she gets in life. This is especially evident in trading: the results you get in the market are the direct and precise consequences of your choices and actions. Most traders battle the market for many years before they realize this. Conservative investors seldom get to this point—they just have too few results to ever know this.”
3. “The vast majority of traders make mistakes and lose money first before they realize that they are the cause of those mistakes, and that they can help themselves to stop making mistakes.”
NB: Please watch out for my coming articles with these titles: ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple RRR – Trading Effortlessly,’ ‘Testimonies from My Subscribers,’ ‘Excellent Money Management Flexibility – Make the Best Choice!’ ‘Resist the Lure of High Risk – Part 3’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Advanced Gap Trading – Trading with Insane Accuracy,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses – Part 4 (Losses Aren’t Abnormal) ,’ ‘The True Holy Grail – The Long Sought for,’ ‘Suicide Trading Techniques,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with a Trading Enthusiast),’ ‘ Clarifying Some Issues – Part 5,’ ‘Optimization of the USDCAD Hedging Strategy – Bringing the USDCAD to Subjection,’ ‘Overview of My Signals Strategies,’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘2 Examples of the USDCAD Hedging Trades,’ ‘Is It Realistic to Give Guarantees in Trading?’ ‘Monthly Trading Report (Augsut 2011),’ etc.
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