Discipline Exercise made the difference

In all the books you read and all the advice you get from Traders, the number 1 thing you hear is, Be Disciplined. What does that really mean, and if you're not disciplined, how do you become disciplined. I have found being disciplined as a trader is very different than being disciplined at work, the gym or other things in life.

Discipline and focus is what makes you a good trader, but how do you get there?

I have spent the last 2 years learning technical analysis, swing trading and after the market crashed last year, learning to day trade. I was no longer willing to take a trade over night after the crash. Now I'm focused only on day trading and trying to develop a system that works. My biggest obstacle is I am not being focused and disciplined to my system. The system works fine, as long as I remain in control of impulsiveness to make trades that my system does not call for.

In October of 2008 I was day trading SPY and DIA and a few stocks. I typically made about 10 to 20 trades a day and usually had losing days or small winning days of $ 20 or $ 30. Losing days were in the 100s occasionally getting into disastrous losses of $1000 in 1 day. The worse the day went, the more I would raise my position size. This always resulted in bigger losses. This had to stop. It was driving me crazy.

I kept thinking, if nobody knows about these losses, I'll make the money back quickly and it will be like it never happened.

What I did do?
I started sending my results each day for review to Kerry, no matter what those results were.
For a time I would send a screen capture of my TradeStation screen to prove I didn’t trade for the day if there were no trades.
I had to make myself accountable to someone, otherwise I would cheat and who would know?

Each day Kerry would send me a critique of my day. He would review positive points of the day and what needed improvement. During this time I had a few days of high trade count and big losses. The advice on how to handle bad days was a key turning point. This helped to not throw you off your plan for the next trading day. Each day I would consider the previous day’s advice, and little by little, my results started to improve. I started to understand what discipline is for a trader and why it works.

Today I am much more relaxed as I trade, I focus only on making good entries and managing a trade well once I'm in. I keep my position size small and concentrate on making good trades, not making money. I make a few trades a day, at most about 6 trades. For the month of March I have traded 13 days and 11 were profitable. I have become more confident about what I will and will not do, and it improves my decision making thru out the day.

We hear all the advice and little catch phrases about how to become a good trader, but I say, you have to live it to really know what it is to be a disciplined trader. Once you are there, you will understand and it will be the only way you will ever want to trade. Working this closely with Kerry has been a turning point for me.

Thanks!
Tim H