Discipline in Investing and Trading

Discipline can be simply defined as your ability to follow your investing and trading plan.

Discipline is a rather simple concept. You just need to define what, when and how you want to trade and manage it. You also need to decide how to handle your account when you are making money and also when bad days come along!

Psychological issues make up 90% of the trading equation. Discipline is the essence of all of the psychological issues. It permeates throughout the whole process. All the rules and procedures and plans do not matter if they are not followed.

There is little doubt that for those who seek success in trading, failure rarely comes from writing the wrong plan. It comes from not writing one at all, or not following the one that is written!

Once you make your plan the following three rules are in order:

1. Don't change your plan during the trading day.

2. Commit to only making changes when the market is closed and

3. Go over your plan every morning before you trade.

The best way to enforce discipline is just by awareness. Keep records of your trades. On every trade, include an answer to the simple question, "Was this trade part of my trading plan?". Yes or no. There is no in-between!

Be aware that the undisciplined traders are almost guaranteed failures.

Ask yourself if you are keeping the discipline, or are you just taking random trades that look good at the moment?

You can't fix something if you do not know it is broken.

You must first be aware that you have a discipline problem!

If you do have the discipline problem, there is an absolute answer for you!

The answer is this:

JUST DISCIPLINE YOURSELF... There is no alternative!

Copyright © 2005 I.E.C. Haramis

haramis@greekshares.com http://www.greekshares.com

Ioannis - Evangelos C. Haramis was born in Greece in 1951 and he studied in Greece, USA and in Belgium. He has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank.

---

The Switzerland of Asia Shines

In many respects, Singapore is the Switzerland of Asia.Begun in... Read More

Keeping It Interesting

Some lines from a movie never leave your mind; I... Read More

Trading Tips No 3: Online Trading and Investing: Buy, Hold, and Hope

So you have learned how to trade the markets by... Read More

It Is Never Too Early To Start A Roth IRA!

The Roth is kind of weird until you get used... Read More

Creating a Financial Future - Putting Your Plan Into Action Part 1

This column has previously discussed "picturing the future that we... Read More

Discipline in Investing and Trading

Discipline can be simply defined as your ability to follow... Read More

Why You Need To Buy and Sell Gold Coins (Part 2)

How to Collect Rare Coins For Fun and ProfitTime has... Read More

Missleading Fund Names Wreak Havoc On Investor Returns!

Mutual fund managers use fake fund names to part you... Read More

College Savings Plans ? Are They The Best Choice For My Child?

College Savings Plans ? are they the best choice for... Read More

Diversify!

The best way to avoid being hit hard by a... Read More

Types of Investment

The word 'investments' is one that most of us are... Read More

Protecting the Tax Advantage of Your Deferred Compensation

The American Jobs Creation Act of 2004 imposed strict new... Read More

Options Made Easy and Investor Education - Simple Enough for a 10 yr Old Kid

How many of you out there think that the market... Read More

Annuity Investment Guide

While there is not a lack of information on annuities,... Read More

Stock Market Horizons: Gold $3,000, Oil $70

In the last two decades, even though gold prices have... Read More

Online Trading Options Strategies - Rolling

Rolling is defined in options online trading as moving a... Read More

Trading Commodity Futures Using Support and Resistance - Paper Trading

Setting Up a Paper Trading AccountQuestion: I cannot trade with... Read More

Copy Cat or How to Use a Successful Trading System

How many books have you read about successful traders? How... Read More

Retirement Plan Considerations Cheat Sheet for Small Business

RETIREMENT PLAN CONSIDERATIONS are something every small business person needs... Read More

Rolling your 401k: Contributory IRA vs. Rollover IRA

In an ideal world you would start your working career... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #1

I love to collect quotes as they concisely promote a... Read More

Angels, Are They Real?

They're real, but few survive. High risk investing is dangerous... Read More

How to Terror-Proof Your Money

"To drift is to be in hell, to be in... Read More

Art Investing for a Financial Future

When we think of investing we probably conjure images in... Read More

Will a Falling Dollar Derail Your Plans for Retirement?

How much are you willing to pay for a tank... Read More

Shareholders Meeting Changing With Times

A significant number of corporations that settled accounts in the... Read More

How to Use Annual Report

There are many steps in calculating the fair value of... Read More

When Its Too Late to Save for Retirement

You are 55 years old (or somewhere around there) and... Read More

Porters Five Forces Analysis

If you've ever listened to Warren Buffett talk about investing,... Read More

Basic Options Terms

Options are good investing and speculative instruments. But options terminology... Read More

5 Things To Know About The Stock Market

50% Of U.S. Households Invest In The Stock Market Individuals... Read More

Investing for Retirement - Not an All or Nothing Play

In 1519, Hernando Cortes, beached on the shores of unexplored... Read More

Discover the Foundation of Retiring Wealthy - The IRA!

Let me tell you about some legal ways to avoid... Read More