Discipline is one of the most important skills one needs on their journey to being a successful trader in the long run. However, to maintain success and peak performance discipline fades away. Discipline is important in the beginning because it’s where we’re transitioning from one state to the other. Meaning in the beginning we’re faced with plenty of conflicts in our game. Hence we need discipline to do what is best for us and our performance. We have the edge to do something else other than what we have to do. Like the edge of letting a loss run for another tick or two in hopes that it turns back in our favour. At that point we need discipline to cut the loss short. Because we truly would rather not take the loss
In studying and chatting to successful traders and analysing the difference in my own performance, analysis and trade execution. What others perceive is enormous discipline is really a natural extension of who they are. They don’t need discipline to do the right thing because they have no conflicts in their minds. For example cutting a loss short is a natural extension of who they are, there’s nothing else they would rather do. Running a winner requires zero discipline for them because there aren’t any other conflicting thoughts competing with the decision and execution.
This is why it’s essential to put as much if not more in working with your conflicts. Assess their roots, ultimately resolving conflicts at a root level. Because every decision you make in the market is 100% yours. Even if you followed or copied someone. Only you bear the responsibility of the consequence. So the conflicts referred to here are all in your mind all coming from within you. The expression “stuck between minds” should really be “stuck between beliefs”.
To quote Dr. Van K Tharp “We don’t trade the markets, we trade our beliefs about the markets”. Whenever you find yourself with conflicting thoughts in your decision making. It’s really just conflicting beliefs trying to get their way. This means in order to permanently resolve mental conflicts, we need to resolve the conflict between beliefs. While we use discipline in the short term to keep us steering in the direction we wish to go. We need to work toward resolving the conflicts at the belief level. Mindful meditation is one of the tools that could help. Paying attention to our thoughts, actions and emotions in real time
Our beliefs also drive our identity. Perhaps we can use how we identify ourselves as a signal to see how much more work is needed in resolving the conflicts. For example if you’re identifying yourself as someone who’s still trying to be a disciplined trader. Means you would still rather do something else other than what you believe you suppose to do (The right thing). But if you identify yourself as a disciplined trader, and there’s no conflicts when doing what you suppose to do. No discipline is needed because doing the right thing is a natural extension of who you are. Be Careful not to lie to yourself.
Which brings me to the most important part of conflict resolution. Knowing what is the “right thing” Which I believe is the main characteristic that separates winners and losers in our sport. Creating rules that define the “right thing” for you. The very first conflict that needs to be addressed is the conflict between creating rules to guide execution and not creating them. These rules will help you to chip away in the resolution. Until being a disciplined trader is a natural extension of who we are. For without rules everything we do is unintended therefore a mistake. (Please note a loss is NOT a mistake).
RESOLVE THE CONFLICT PROBLEM RESOLVE THE DISCIPLINE PROBLEM