Let us create a 3D eBook for you!
Let us create a 3d Digital eBook for you! DigyCat.com

Discipline in Trading and Investing


The one thing I can think of that most affects both trading and investing has to be self-discipline.

Being disciplined is fully 50% of the job of trading or of investing. I don't care how good your trading system is, without the discipline needed to follow the system you don't have much of a chance for success in meeting your goals.

It doesn't matter how great a planner or organizer you are, without discipline your plans will most likely fail to bear fruit.Discipline involves self-control, and self-control involves your ego. If you want to succeed, you must learn to trade without your ego getting in the way.

Don't be fooled. A person's self image must be separated from his trading or his investing. When personal self-worth gets tangled up with your business activities, it not only wrecks your best trading or investing intentions, but it also damages your self-esteem.

You hear and read about great traders and investors who have done amazing things. They tell about how great they are. They talk about "The Big" trades they made. They talk about "Big" numbers. It all derives from their oversized egos.

Don't be misled. Sooner or later, there are "Big Downfalls." It goes with the territory.

For a moment, let's look at the results of what a huge ego can do. Due to his oversized ego, Nick Leeson brought down the Barings Bank. Victor Niederhoffer ran his fund into deficit. John Merriweather was so sure his strategies would work that he ended up threatening the health of the entire banking system by betting more than fifty times his capital that he could forecast, without any chance of a loss, the direction of various bond markets.

As we study the examples of these three men, there seems to be a pattern of temporary real success followed by a collapse for themselves and for those caught up in blindly following them.

Here are the kinds of problems that arise from putting your ego into the mix.

- Not putting in stops: You don't want to be proven wrong.

- Hesitation before entry: You want reassurance before you act.

- Overtrading: You want to prove how really big you are.

- Not getting out when you should: You have married your trade and just don't want to get a divorce. Getting out would mean you were wrong.

- Adding to a losing trade: You are making a massive effort to prove you were originally right.

- Grabbing a profit too soon: You want affirmation that you did the right thing.

- Missing an opportunity because you can't pull the trigger on a trade: You are still living with past mistakes.

In my 47 years of trading, I have seen great traders and investors come and go. All too many of them lost everything they had ever made. The great W.D. Gann died a pauper. The legendary Jess Livermore was flat broke when he committed suicide.

I have known dozens of traders who lost money because their egos got in the way.

I agree 100% with the following statement by Marty Schwartz, the great S&P 500 daytrader.

"I've said it before, and I'm going to say it again, because it cannot be overemphasized - the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself. You have to stop trying to will things to happen in order to prove that you're right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you're right, but to hear the cash register ring."

To that I would add, "trade what you see, not what you think." You cannot afford to get your ego or your opinion involved in your trading activities.Because both trading and investing are uncertain businesses of probabilities filled with uncertain outcomes, a huge ego or a fragile ego can easily get smashed. Defending your ego saps you of energy, distorts your perception, and will eventually destroy your business.

If your self-esteem is connected to your trading and investing choices, if it goes up and down with the results of your activities, you and your business are in trouble. Your self-image needs to be strong, not at the mercy of the outcome of your trading or investment choices.

To succeed in the markets, you have to have confidence in what you are doing and confidence in yourself. But self-confidence must not become confused with self-image. Remember not to marry a market or a trade. If you see you are not right, be quick to get out. Run your trading or investing as a business. Practice self-discipline. You'll be glad you did.

All the best in your trading,

Joe Ross
Trading Educators Inc.
http://www.tradingeducators.com/?source=ezinearticles

Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts?." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach.

He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.

Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA.

Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.


MORE RESOURCES:

Investing - Google News

This RSS feed URL is deprecated

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Carrefour Steps up E-Commerce Push, Chases Deal in China - U.S. News & World Report


U.S. News & World Report

Carrefour Steps up E-Commerce Push, Chases Deal in China
U.S. News & World Report
People are silhouetted as they attend a news conference to present the strategic plan of French retailer Carrefour in La Defense, near Paris, France, January 23, 2018. REUTERS/Philippe Wojazer Reuters. By Dominique Vidalon. PARIS (Reuters) - Carrefour ...
Carrefour Plans to Cut 2400 Jobs, Invest $3.4 Billion Bloomberg

all 27 news articles »

US Product Lets Investors Triple Bet on Popular Tech Stocks - U.S. News & World Report


U.S. News & World Report

US Product Lets Investors Triple Bet on Popular Tech Stocks
U.S. News & World Report
Commuters pass by the NASDAQ Marketsite in New York, May 21, 2012. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS) Reuters. By Trevor Hunnicutt. (Reuters) - Investors are getting a high-octane way to bet on or against the stock market's ...

and more »

Cramer's guide to investing in the stock market's winning sectors - CNBC


CNBC

Cramer's guide to investing in the stock market's winning sectors
CNBC
As a result, investors flocked to steady growth stocks like Visa and Mastercard, shying away from traditional bank equities altogether. Other than Visa, Mastercard, Discover, PayPal and ancillary plays like Moody's and Morningstar, "it was simply too ...

and more »

The Dinner That Changed the Investing World - Wall Street Journal


Wall Street Journal

The Dinner That Changed the Investing World
Wall Street Journal
As the first U.S. exchange-traded fund was being launched 25 years ago, the fund's backers gathered for a casual dinner on the 10th floor of the American Stock Exchange's art deco downtown headquarters. Ivers Riley, an exchange executive, made opening ...

Ripple Drops As Nervous Investors Flee Cryptocurrencies - Forbes - Forbes


Forbes

Ripple Drops As Nervous Investors Flee Cryptocurrencies - Forbes
Forbes
Charles Bovaird , Contributor I am a financial writer and consultant who focuses on investments. Opinions expressed by Forbes Contributors are their own. XRP fell today, losing more than other top cryptocurrencies. Shutterstock. Ripple's XRP token ...

and more »

General Electric: Lessons In KISS Investing - Seeking Alpha


Weekly Register

General Electric: Lessons In KISS Investing
Seeking Alpha
While I think retail investors often get themselves into silly situations, Keep It Simple Stupid (“KISS”) is always one of the best approaches smaller investors can take. While investors need to be educated on the companies they own or would like to ...
Financial Newsletter - Zacks Investment Research Zacks Investment Research
General Electric Company - GE - Stock Price Today - Zacks Zacks Investment Research

all 208 news articles »

One-Third of Americans Spend More on Coffee Than on Investing ... - Motley Fool


One-Third of Americans Spend More on Coffee Than on Investing ...
Motley Fool
There are plenty of reasons Americans aren't investing as much as they should. For many workers, it's a matter of not having the money available after paying living expenses. For others, it's a matter of absent knowledge and fear. But even when these ...

and more »

'Cash Flow Investing' - A Report Card - Seeking Alpha


'Cash Flow Investing' - A Report Card
Seeking Alpha
I have been a proponent of "Cash Flow Investing" for the last year and a half or so. I have never said that it is a substitute for appreciation plays but that it is an adjunct to them. For some people and institutions desiring a steady stream of income ...

Social, bitcoin and other hot topics at the Inside ETFs conference - CNBC


CNBC

Social, bitcoin and other hot topics at the Inside ETFs conference
CNBC
The biggest names in the ETF business gather to debate the future of investing and break down the skyrocketing growth of exchange-traded funds.

and more »

LargeFriends.com - the best dating site for plus-sized singles!
SuccessfulMatchCentral.com - the best dating site for plus-sized singles!

PreLaunchX

MyIdeal Domain Is For Sale - $8,000 For Enquiries eMail Us

© www.MyIdeal.biz - 2012

home | site map | links