Maintain your old Siemens Hipath system

Discipline in Trading and Investing

The one thing I can think of that most affects both trading and investing has to be self-discipline.

Being disciplined is fully 50% of the job of trading or of investing. I don't care how good your trading system is, without the discipline needed to follow the system you don't have much of a chance for success in meeting your goals.

It doesn't matter how great a planner or organizer you are, without discipline your plans will most likely fail to bear fruit. Discipline involves self-control, and self-control involves your ego. If you want to succeed, you must learn to trade without your ego getting in the way.

Don't be fooled. A person's self image must be separated from his trading or his investing. When personal self-worth gets tangled up with your business activities, it not only wrecks your best trading or investing intentions, but it also damages your self-esteem.

You hear and read about great traders and investors who have done amazing things. They tell about how great they are. They talk about "The Big" trades they made. They talk about "Big" numbers. It all derives from their oversized egos.

Don't be misled. Sooner or later, there are "Big Downfalls." It goes with the territory.

For a moment, let's look at the results of what a huge ego can do. Due to his oversized ego, Nick Leeson brought down the Barings Bank. Victor Niederhoffer ran his fund into deficit. John Merriweather was so sure his strategies would work that he ended up threatening the health of the entire banking system by betting more than fifty times his capital that he could forecast, without any chance of a loss, the direction of various bond markets.

As we study the examples of these three men, there seems to be a pattern of temporary real success followed by a collapse for themselves and for those caught up in blindly following them.

Here are the kinds of problems that arise from putting your ego into the mix.

- Not putting in stops: You don't want to be proven wrong.

- Hesitation before entry: You want reassurance before you act.

- Overtrading: You want to prove how really big you are.

- Not getting out when you should: You have married your trade and just don't want to get a divorce. Getting out would mean you were wrong.

- Adding to a losing trade: You are making a massive effort to prove you were originally right.

- Grabbing a profit too soon: You want affirmation that you did the right thing.

- Missing an opportunity because you can't pull the trigger on a trade: You are still living with past mistakes.

In my 47 years of trading, I have seen great traders and investors come and go. All too many of them lost everything they had ever made. The great W.D. Gann died a pauper. The legendary Jess Livermore was flat broke when he committed suicide.

I have known dozens of traders who lost money because their egos got in the way.

I agree 100% with the following statement by Marty Schwartz, the great S&P 500 daytrader.

"I've said it before, and I'm going to say it again, because it cannot be overemphasized - the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself. You have to stop trying to will things to happen in order to prove that you're right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you're right, but to hear the cash register ring."

To that I would add, "trade what you see, not what you think." You cannot afford to get your ego or your opinion involved in your trading activities. Because both trading and investing are uncertain businesses of probabilities filled with uncertain outcomes, a huge ego or a fragile ego can easily get smashed. Defending your ego saps you of energy, distorts your perception, and will eventually destroy your business.

If your self-esteem is connected to your trading and investing choices, if it goes up and down with the results of your activities, you and your business are in trouble. Your self-image needs to be strong, not at the mercy of the outcome of your trading or investment choices.

To succeed in the markets, you have to have confidence in what you are doing and confidence in yourself. But self-confidence must not become confused with self-image. Remember not to marry a market or a trade. If you see you are not right, be quick to get out. Run your trading or investing as a business. Practice self-discipline. You'll be glad you did.

All the best in your trading,

Joe Ross
Trading Educators Inc. =ezinearticles

Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts?." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach.

He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.

Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA.

Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.

In The News:

Scrapping for food to survive: Inside the frontline of Yemen's war
Mon, 18 Feb 2019 16:09:00 +0000
Yemen's warring parties have agreed to withdraw their forces from Hodeidah - providing fresh hope for the fragile ceasefire in the city.

British man missing from popular Australian beach
Tue, 19 Feb 2019 01:56:00 +0000
A British man has gone missing from a popular beach north of Sydney in Australia.

Great white sharks could help cure cancer in humans
Tue, 19 Feb 2019 00:00:00 +0000
Great white sharks could help scientists to discover a cure for cancer in humans thanks to their huge and extraordinary genome.

Senators may investigate 'coup' to remove Trump
Mon, 18 Feb 2019 09:28:00 +0000
An investigation may take place into claims senior officials discussed whether Donald Trump could be removed from office.

British tourists 'stocking up on euros' as Brexit looms, figures suggest
Mon, 18 Feb 2019 11:33:00 +0000
Britons are stocking up on euros ahead of Brexit, new figures suggest.

Erfahrungen mit Pallhuber Wein
Agen Bola SBOBET Terpercaya

Travel in comfort and at your leisure with CT Airlink Limousine & Car Service for top quality private transportation and exceptional customer service. We operate Sedans, SUVs & Vans for CT Car Services to covering all Connecticut airports including Car Service from CT to Newark Airport , Mohegan Casino Uncasville CT, Foxwoods Casino Mashantucket CT, Manhattan Cruise Terminal NYC, Brooklyn Cruise Terminal NYC and Bayonne Cruise Terminal NJ. CT Airlink hire licensed and friendly chauffeurs who have in-depth knowledge of the Areas.

5 Ways To Protect Your Bond Portfolio From Rising Interest Rates

The Federal Reserve recently raised its target federal funds rate... Read More

Is Your Mutual Fund the Right One for You?

Mutual Funds are considered to be one of the best... Read More

Stock Market Money Management Skills

Let's start by saying: You can't be afraid to take... Read More

Bearish or Bullish?

If you are interested in stock investing and the stock... Read More

My Way Or The Highway: Give Your Financial Professionals A Good Talking To!

All this talk about Investing is encouraging lately. Over the... Read More

California Deparment of Corporations and Franchise Opportunities Law

What CA Needs To Do To Address Issues in FranchisingWe... Read More

Direcway & Wildblue Set to Square Off this Fall?

There is a cat fight brewing between Direcway LLC, Starband... Read More

Expand Your Pool of Investors for Your Company

If you own a company that sells complicated products and... Read More

Planning for Retirement

Almost without exception, people don't start planning for their retirement... Read More

Issuing Warrants to Investors

When raising capital for a business venture, warrants are a... Read More

Risk and Reward

If you are doing your own investing in the stock... Read More

How To Find An Investment Advisor

Do you think you need an Investment Advisor? Hold on... Read More

Need To Trade!

You don't HAVE to be trading.As a novice trader, you'll... Read More

Profitability And Stock Turn Rate

The inventory of the typical store represents the largest single... Read More

Investing for Retirement - Not an All or Nothing Play

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

Keep Stock Market Investment Profits

Have you had one of those huge investment winners ?... Read More

Playing With Money - And Making More

Ready to start playing with your money? Not interested in... Read More

Planning Starts with the Basics

When developing a plan for your finances, the toughest question... Read More

Investing in World Markets

There are many different ways to invest in world markets:... Read More

Franchise Investing, Franchise Opportunities and Franchising Renewals

Have you considered buying a franchise instead of trying to... Read More

Landlording 101, Tricks of The Trade

Looking Inside Your Tenant's Mind Basic Mind-Reading Report 101 for... Read More

Five Sure Fire Way to Secure Your Financial Future

"You can be poor when you're young, but you can't... Read More

Super Rules, OK?

Do you rule your superannuation or does it rule you?It's... Read More

Asset Allocation Lessons: The 70% Inflation Solution

For investors only... and for speculators who need to invest... Read More

Short Term Savings Products

When you invest, it simply means that you are putting... Read More