Top Ten Reasons Traders Lose Their Discipline
The following was part of an email that was sent to me. I found the 10 points to be very solid and many really resonated when I look back at the tough times I have gone through as a trader. I do not know the author of these points, so my apologies on that. If I find out (or if you any of you know, let me know) I will update the post to give credit where credit is due. But alas, as we start out the new year, here are somethings to consider as you (and I as well) make this your best trading year yet.
Losing discipline is not a trading problem; it is the common result of a number of trading-related problems. Here are the most common sources of loss of discipline, culled from my work with traders:
10) Environmental distractions and boredom cause a lack of focus;
9) Fatigue and mental overload create a loss of concentration;
8 ) Overconfidence follows a string of successes;
7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;
6) Loss of confidence in one’s trading plan/strategy because it has not been adequately tested and battle-tested;
5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;
4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);
3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;
2) Not having a clearly defined trading plan/strategy in the first place;
1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.
I hope you enjoyed that little piece and maybe discovered something about your trading which may be a problem area.
Best wishes as we head into the new year,
Why not start out the trading year by learning a simple and complete trading system? My ebook covers it all: Profiting From the Forex Market Using Chart Patterns
Cory Mitchell, CMT
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