Trading: discipline your best ally.

Trading: discipline your best ally.

Most successful people attribute their success to discipline. They consider that discipline is more important than knowledge, intelligence or skills. There is one Japanese phrase that says, “sooner than later, discipline will overcome the intelligence”. In fact, there is a study conducted by Duckworth and Martin Seligman in 2004 that prove that discipline is a better indicator of success than IQ. Probably have you heard about Japanese people being a smarter race, but, the reason of their success is the discipline.

Why discipline is so important?

Discipline is the force who keep us away from bad habits. Lack of discipline would make you fail on your goals. The #1 reason people fail achieving their goals is lack of discipline. This kind of people usually will drop the towel at the first difficulty.

Day trading and discipline

Day trading as name say it, is a daily activity and you are the only responsible of doing it. Discipline is going to be your first and most important ally in order to keep trading every day. It would beat phrases like “I will start later today”, “I am lazy today I would trade tomorrow”, “I have someone coming home today, I will trade later”, “I made enough during the week I will continue next week”, “I would no reinvest today profits, I will go to expended on a new speaker” or many others that would move your goals far and far away from accomplish.

Discipline will also maintain your loss in control, one of the key behaviors to be successful day trader is controlling your loss. Sometimes trades don’t have enough discipline to ejaculate a stop loss and they keep a bad position waiting the price to go up and they end losing more money that they should be.

One of the biggest mistake of new traders is that most of them have the misconception that make money as a day trader is an easy task. Probably some of you has seen some advertisement, YouTube videos or trading courses that say “How to make 1.000$ a day with day trading” or “1.000$ to a 1.000.000 in 1 year” or many other.

If it were that simple, everyone would be a successful trader. We need to understand that trading is just a competition and as so, all competitions have winners and losers. Traders are competing to get the more profits they can get, and they are taking that profit from other traders. Buy orders tent to increase the price of an asset and sell order for the other hand decrease the price of the asset. Avery time you place a buy position you need someone closing their position in order to buy. In other words, markets are compound of a vast group of traders and their main objective is take money from other traders like you, while you are trying to take them.