Any experienced trader will tell you that being successful is, in large part, a matter of overcoming all the hurdles that get in your way. Now there are two basic types of hurdles:
The physical ones and the mental ones . . . and actually some-times they get intertwined.
Let’s look at a few of them:
** A big thunderstorm causes an electrical surge or outage.
You’re in the middle of a trade, and you’re scrambling around groping for your cell phone so that you can call the floor directly and have them be your eyes and ears. That’s stress, man.
** You’ve got your eyes peeled on the charts, waiting for the signal so you can pull the trigger.
A phone call comes in about something other than the trade you are concentrating on. You know you can’t talk, but you don’t want to be rude. Well, being polite just may cost you. Trade missed. You’ve waited all morning for everything to fall into place and you missed it. You’re angry.
** Today’s a good day. Your primary trade is going well.
You’re getting close to your target but the RSI seems nowhere near a peak. You don’t want to take the profit quite yet even though you’re right on top of your price target. Hey, let’s let it ride a little and we’ll just trail it with a stop. Surprise news and “el dropo” and the market blows through your stop. You feel like a jerk.
As you know, I could go on forever.
So, what’s my point?
Distractions to following your system come from outside (lightning and phone calls) and inside (your “feelings” about what could happen). (See my recent article “It’s not your trading system”).
It’s your job to MAKE THE COMMITMENT to follow your tested trading system. You’ve got to be deadly serious about it.
Get caller ID so that you take only the calls that you HAVE TO take.
Have a contingency plan when the lights go out.
Note: I knew a trader that held to the concept of “mental stops”. He was lucky for a while, but when a power outage hit in his part of New York City, he couldn’t get through to the floor.
The lights went back on in about 15 minutes but by that time he had lost a bundle. His “mental stop” turned to “mental anguish”. After that, he put his stops in . . . but just for a week and he was back to his old habits.
He doesn’t trade anymore. The sad part is that the guy had talent.
Trading is a business. Treat it like one. You’ve worked hard to arrive at a system that you can trust . . . well then, do everything in your power to stay focused on the ONE TASK of following that system to the tee.
To do otherwise is to be out of control.
Maintain your Focus.
Maintain your Discipline.
At all times.
Norman Hallett, CEO and Head Trainer of The Disciplined Trader Intensive Program has written a terrific FREE E-book "Taming Risk" which gives you clear risk and money management guidelines to improve your trading plan.