Today we’ll look at a topic that is hard for many but leads to great results, the practice of Discipline. We have been told all our lives to be disciplined yet it is so hard to practice. Why is that? Why is discipline so hard? And more importantly, what can we do about it? Here are some of the tips that have helped me cultivate discipline in my trading. If a rebel like me can do it so can you!
1. Remove the Noise
Before you sit down to do your market analysis or postmortem daily review, clear your environment. Today we are over-stimulated by the multitude of connection mediums and things trying to take up our mental real-estate. Shut these down. Remove all the noise created by Facebook, tweets, email, YouTube etc. If you are particularly challenged about turning these off, you can buy apps to force it on you for the time that you are working on something important. Create a clean environment to allow your mind to focus on what you are doing without having any competing priorities.
2. Don’t overthink it
A lot of times we make the things that we avoid bigger than they really are by thinking too much about them or trying to do them perfectly. Ditch that mentality. Focus on just getting it done, right or wrong, before you think about perfection. This focus on getting the task done will develop mental behaviors and form the foundation for new habits. Once the habit is in place, you can then refine the task and do it better if you choose. You will find, however, that the task of just doing it helps you improve over time.
3. Start small
Before you get started, make a list of everything you would like to do on a daily/weekly/monthly basis. Put it all down on paper so you know what you would like to accomplish. Prioritize your list, starting with the highest priority item at the top and lowest priority last. Now, instead of trying to do all of it at once, like daily market analysis, trade logs, daily and weekly trade and market reviews etc., start with just one thing, your top priority. Take everything else that you need to do out of your mind. Work on doing that one thing consistently, day in day out. Once that gets easier and you get into a habit of doing it consistently, move to the next item on your list. Incorporate that into your routine. Keep doing this till you have incorporated everything you want to do into your routine. Before you know it, all these things will become second nature to you and you will be doing them consistently.
4. Plan to fail
No matter hard you try, there will be times when you just don’t do what you had planned on doing. How are you going to handle that scenario? Don’t say I will just do it, because you won’t. Instead, have a plan for how you will course correct. What I have found is that a lot of time one slipup leads to another and another till we are so far off course that we just give up. Don’t let that happen to you. Let’s say, your plan is to do a postmortem trade/market review every evening. Say you just can’t do it on this particular day because your child gets sick, your best friend calls and needs some help, you have to prepare for a dinner party or just because your dog ate your computer ;). What are you going to do? Most people will beat themselves up, feel guilty or pretend it is not important, completely jeopardizing their plan. I suggest you have a pre-planned scenario already laid out to stop yourself going down the slippery slope of cascading effects.
For example, think to yourself…
When I am not able to do my postmortem market review in the evening…
- I will review the market the next morning even though it may feel too late to do it then
- I will call up a friend and ask them to be my accountability partner. (Tell them when you’ll send them your review. Then do it!)
- I will pick a time for review when I have the least number of demands on my time. That time will be _____________. Pick a time and stick to it! Say “No” to everything else.
These are some of the steps you can take to bring discipline to your trading. Discipline may be hard at first but the more you practice, the better you’ll get. So get started and take small steps every day. Discipline leads to consistency which leads to more profits. The bottom line is, if you want more profits from your trading, start practicing discipline.
Leave a comment below. Tell me how you practice discipline in your trading and how do you plan for failure.