Trading Discipline


New Traders fail to realize that there are actually three positions a trader can have in the market: Long, Short & Flat .It is very important to learn to wait for the markets & let them come to you. Then your job as a trader is to be ready for them. Buy, Sell or Stand aside.

Many traders are in such a hurry to start trading & make some money that they grab the first trade that looks good to them rather than waiting for the market to set up a trade which could have a higher probability of success.

Trading is full of many paradoxes& many traders think that to make more money they have to trade more but this is not, you have to do the exact opposite – Trade Less, But be Right More often.

There are many methods to build superior trading habits. Good trading habits will make trading a part of your routine, rather than a task. Getting in the habit of dong everything exactly to plan will boost trading profits, markings one more step in the path of financial freedom.

Following your own trading plan is very important to success. Always trade as your capital allows. Overextension of credit is dangerous & can compound losses just as easily as gains.

You must know exactly what kind of trader you want to be & what kinds of strategy you want to follow & stick with it. The biggest reason is that people fail in trading is because they over-trade. Overtrading can kill any account, overtrading can be the kiss of death for any trader. New traders should be especially cautious not to overtrade.

It is important to allow diversification among the markets you follow however, si as to allow for the maximum number of trading opportunities. You would not choose all power stocks to follow or all gains if trading in commodities. By taking one or two picks from each category you should have enough to across section to catch most of the opportunities within that category.

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