Have you ever heard “I know exactly what should be done and how to fix it, but I just cannot?” Have you blamed yourself for lack of discipline when trading? If so, you should know one thing – you are not alone! It is clear – if you do not have discipline, then you lack control over trading. Here are four steps that can improve that:
1) You have to realize that markets do not depend on You
Markets are not interested in you but you are the one who is interested in the markets. You must realize that your success is entirely based on how you will reacts to market and not how the market will react to your position, because nothing depends on you.
2) No place for emotions
Here is an example with the football game: If a player gets injured, it creates uncertainty in the game. The rest of the team, however, can not afford to feel sorry for him and must adjust to their plan towards the victory. Markets are unpredictable and can always have “injury”, it is important to adjust. But, how to deal with emotions? Before any decision it is better to use the “pause” method:
Take a breath
Get away from the monitor
Turn off the TV
Do not listen to any news
Once you do this, your brain will release and will be ready for new challenges.
3) Look objectively at your portfolio
How to do this? Just find answers to the following questions:
Why an item is in my portfolio?
Are market conditions or fundamentals affecting my portfolio?
What are the prospects in portfolio?
What is the current risk and what it will be in the future?
Are the positions in my portfolio were opened under stress?
4) Do not fight the market – cooperate with it as a team
Perhaps, you’ve heard the phrase “Do not look at the market as you want to see it. Watch it as it is”. In this case, determine the rhythm of the market and work along with it. If you cannot determine the rhythm, it is better not to open positions for some time. Anyway, remember that you must be in the game to win, not just to participate.
Trader Aleksandar Kumanov