I will explain how I maintain discipline in my trade execution.
When you execute your trades well, you can tell if your strategy isn't working or if your mindset is the issue. For me, sticking to my plan over time has led to consistent profits. I avoid overtrading and only trade when I have an edge, which keeps FOMO and revenge trading at bay. Staying disciplined helps me adapt quickly.
Unfortunately, many traders don't execute properly due to a fear of failure, despite doing everything right.
Four Reasons Why People Struggle to Make Progress:
Desire to Make Money or Be Right: An overwhelming desire for profit or to always be right often overshadows disciplined execution.
Unhealthy Relationship with Loss: A negative attitude towards losses leads to irrational decisions.
Belief in Outsmarting the Market: Trying to eliminate losses from a trading system is unrealistic and harmful.
Short-Term Thinking: Focusing on individual trades rather than the next 100 creates inconsistency.
Every successful trader started where you are now. If they could do it, so can you.
Here's How, Step by Step:
Step 1: Approach Trades Like a Scientist
Develop a thesis, analyze the data, and refine your process over time through repetition.
Thomas Edison said, “I have not failed. I've just found 10,000 ways that won't work.” He didn't let failure discourage him but used it to refine his approach.
Step 2: Execute and Assume Losses for 20 Trades
We often haven't fully accepted the possibility of loss, even with stop losses. This creates psychological barriers.
By assuming losses for the next 20 trades, I inherently accept each risk. With the risk "paid" in advance, I can objectively test my system and refine it.
Step 3: Believe You Are Already Disciplined
Saying, "I'm not disciplined yet, but I will be," makes discipline a moving target. If you think this way, you'll struggle.
Act as if you're already disciplined, and you'll make trading decisions that reflect this.