How to be a Disciplined Trader

This question about How to be a Disciplined Trader comes from Mirko M. who asks…

“There is no strategy that can work if I am not disciplined to apply [it]…and I am not. So how do I become disciplined?.”

First, let’s define discipline. Discipline is essentially doing what you know you should do, whether you feel like it or not. Therefore a lack of discipline stems from trying to avoid activity that creates discomfort or an activity that you perceive to be uncomfortable, either physically, psychologically or financially. The paradox is that to overcome these discomforts you need to slowly increase your exposure to them.

The Easy Answer:

Give your money to someone else to manage. We offer a multi strategy managed account as an example, but you have many managed options.

The Soft Answer:

The fact that you’re consciously aware of your lack of discipline means it’s highly unlikely that any pop-psychology here or elsewhere is going to help you, but let’s throw a few ideas out there anyway. To overcome discomfort or fear you need to prove to yourself that there is some benefit beyond the discomfort or that there is actually nothing to fear. To do so you need to take small, measured steps in the direction of discomfort. Clearly articulate the rationale behind the decision; what you expect to happen, what to do if that doesn’t happen, how to manage the situation. This creates a solution pattern and so long as the results are measured you can improve control over your actions. Finding discipline in trading or investing is no different to losing weight or quitting smoking. Success comes from patience and taking little steps often. Not lightening strikes.

The Real Answer:

The question is not “How do I become more disciplined?” The question is actually, “What is stopping me from being disciplined?” And unfortunately you won’t find that answer in Google or talking to yourself in a mirror. The answer will be in your subconscious and that’s a place you can’t access on your own (if you could then you’d not have an issue with discipline!). So if you’re really frozen then you should seek professional help from a psychologist.