As traders we all know that discipline is important. But what exactly is trading discipline? You’ve probably had it drilled into your head that to be a disciplined trader you must follow your ‘system’ at all costs.

Is it any wonder that most traders spend the majority of their time trying to find the one best entry and exit system? Of course not. It actually makes perfect sense. Then again, is it any wonder that most traders lose money? What if it was possible to look at trading discipline in an entirely new and more empowering way? Let’s first discuss a key issue.

What is a trader?

In our opinion, a trader is simply a Profession Decision Maker. That’s your job as a trader. You get paid (very well) if you can make good decisions, in real-time, with real money, under real pressure

The decisions you make, and more importantly, the process you use to make your decisions that will ultimately make or break you.

What is trading discipline?

We define trading discipline as the ability to clearly and calmly make the best decision at any given time. That sounds simplistic. But in reality, with money on the line, it takes EXTREME discipline to stay focused on your decision making process rather than on your results.

Think about the last time you were having a great day and you had locked in some solid profits. Now, think about the last time you were having a tough day and you were down considerably. What were you thinking? What were you feeling? When you were down, were you completely focused on making the best decision, regardless of outcome? Of, more likely, were you focused on getting your money back?

There lies the difference. To become a great trader you must learn to stay in the moment. You must learn to focus on your decision making process…not on your results…every time your sit down to trade.

How do you improve you decision making?

Really, there are only three decisions you ever have to make in trading. Buy, sell, or do nothing. If only it were that simple! To be a consistent winner, you need a decision making model or plan you can lean on in the heat of the moment, when money is on the line, and when your emotions are high. It’s like a golfer with a pre-shot routine.

Your focus becomes your decision making process, not whether the trade won or lost. After a short while, you’ll find making this subtle change is incredibly freeing emotionally. Plus, by having the discipline to NOT focus on your results, your results will actually improve.

At eMiniDayTrader, we teach what we call the “2 out of 3 Decision Making Model”. We’ll discuss more about this way of making trading decisions in future articles.

For now, here are some helpful resources:

For more updates from Dave, visit the eMiniDayTrader blog at eMiniDayTrader.com