Highly disciplined traders are generally very responsible people with a long history of being punctual, factual, and characteristically functional for every available moment of perceived responsibility. Since trading takes an enormous amount of discipline, traders such as this are likely to do very well when it comes to sticking to their trading plan, following through on their intention, and creating an environment of success. However, what about risk taking? For all that discipline buys any trader in the game, there are times when a risk is a necessary call.
You can't make it through the trading world only taking risks just as you can't make it through the trading world only by maintaining discipline. Sometimes there has to be a bit of give and take to make it all come together under certain situations. Learning to recognize those situations and making good use of them is part of becoming the type of trader that you are looking to become.
Using discipline to get where you want to go will work most of the time. However, because there is a much lower tolerance for risk taking and going against the grain, there is also the likelihood that a disciplined trader will remain quite average for a long period of time. Without the ability to assess a good risk, the disciplined trader will continue down one specific path until there aren't any other choices. The undisciplined trader will make a great number of mistakes while they continually abandon their trading plan time and time again.
Finding a firm and well achieved balance between the two is not as simple as perhaps it should be, but in the spirit of growth it is necessary to play around with both of these elements and start learning when it is a good time to stick to the plan and when it is a good time to become more free and more radical in the judgments of the market. When you can't control the outcome, such as is the case in trading, you also can't control the effectiveness of any given trading plan. Since you can't control the market through basic self control, then your only choice is to develop skills that allow you to notice when conditions are changing enough to encourage a little more risk from your perspective.
The beautiful idea behind all of this is that you get to try on new things and see how they work out. While it might be more comfortable for you without the existence of the financial link, you don't necessarily have to commit to using your money. There is no reason why you can't go through a lot of this without any money. If you simply make decisions and track it as though you had made the investments, you can learn without financial risk about the nature of self control and discipline and personal growth and freedom to change your mind.
This is not to imply that discipline is not one of the keys to successful trading because it most absolutely is. But instead of dedicating all of your time to learning and honing self control, you should also be noticing when to not in total control and when to go with your gut over your documented trading plan.
When a trader decides to exercise the disciplinary muscle, he is most often alone in the mix. He isn't taking into account the actions of others and he (or she) isn't really grappling with exercising any of the freedom to make an impulsive decision muscle. This is all fine but when you decide to stick with only one particular methodology then you tend to miss out on other opportunities. Learning when to exercise total self control and when to exercise total risk taking behavior is only something that a little advice and experience can effectively teach.
About the Author:
If you would like to immensely improve your trading and investing results, check out
www.secrets2trading.com
AND for a Limited Time, you will also receive a FREE copy of a limited number of the amazing book "Trading In The Zone" which is jam-packed with daily trading ideas and psychological preparations to instantly improve your trading and investing performance.
No. of Times this article has been viewed :
72
Date Published :
Dec 1 2008