I think this is kind of a narrow-minded view of what discipline means.
To me, discipline means staying grounded, staying smart, avoiding mistakes, and things that will make you have regret in hindsight. It does not mean you are blindly following any rules. It means you are adhering to your own "rules," even if your "rules" state that you need to adapt and adjust to the market.
To me, it's like being a quarterback. A good quarterback is disciplined. That doesn't mean he blindly throws to his first option. It means he goes through his options, chooses the best one, adjusts, improvises, and makes the statistically intelligent play, and does so consistently.
Discipline to me means that if next week the market does, move for move, exactly what it did today, I will make the exact same entries, non-entries, and exits.
The following user says Thank You to bradyk2 for this post:
Well at this point I think we're debating semantics. The link you provide says "usually understood to be synonymous with self control." Self-control is defined as being able to control one's emotions, which in my opinion is the biggest factor in avoiding mistakes.
So it depends on which definition you take, and what your strengths and weaknesses as a trader are. For me, the key part of trading that I need to master to be successful is staying smart. Staying smart requires me to control my emotion, which requires discipline.
Either way, different angles on the same thing it seems. I certainly understand what you're saying and you seem to understand what I'm saying so I think everyone wins!
Discretionary trading can be very high risk for those that have not developed the proficiency and confidence to deal with un-defined decision-points.
Trading is a decision-making process where information is taken in, evaluated according to certain criteria and/or methodology, and then actions is taken based on the decision made and the available choices. It involves a series of decision points and at each point, if how to make that decision isn't clear or the skill developed, that open decision point then becomes an invitation for one's emotions to come in and make it for you.
If a trader has not yet developed the decision-making skills and established the confidence in their ability to make the right decisions, then in my experience and in helping other traders, the question of whether or not to be a discretionary trader is simple. Don't. Use a mechanical system until you have had sufficient success to have the confidence in your decision making ability.
The question is more really of 'when' rather than 'if' you should pursue discretionary trading. Until established, stay mechanical. Only after proper 'seasoning' should one consider discretionary.
I think what throws a lot of new traders for a loop is impatience. It's very easy to say that a newbie should trade a mechanical ruleset - but you should say at the same time that it may take a long time to develop one. In my case I've been testing just about every idea I can find on the forum, looking for something I can trade for income. It's easy to see how these ideas could work, but it's hard to pin down the conditions so well that you get from a vague idea that could work to a well-defined and proven method.
To hedge my bets I'm also trying to get as much screen time as possible. I have no idea what's going to click first: developing a ruleset or developing the ability to trade off feel.
I do know that I won't risk a dollar until one of those clicks, because I value my peace of mind too highly to do otherwise - but from cruising these forums I can see that that's a little abnormal.
In my humble opinion we appeared to have forgotten with the very essence,base and pillars of trading which are the foundation of these argument (setup and discipline).
the pillars of trading in my understanding are three:
3. money MGT.
They are like a stool with a three leg, if you remove one the other two can not make it stand.
when you say setup, you are talking about method and when you say discipline you are talking about psychology.However,the issue of saying which one is the first or the best to be considered does not arise because each one of them is meaningless without the other.
Discipline in my own understanding is all about following the rules without changing or tweaking them no matter how hard and no matter how anxious you feel to do so, it is also all about knowing yourself and don't act stupidly or uncontrollably.
Is any bar or combination of bars that will convince you that taking a trade is worthwhile at a particular time and based upon some given principles.
IS SETUP FIRST ,OR DISCIPLINE ?;
Everything in life have an order and series( Small to Big, Baby to Adult etc) setup and discipline too have such orders.
Setup should come first then discipline ,because without setup (method) on what are you going to apply the discipline and perhaps money management ?.
Please, i would like somebody to answer this question before i proceed.;
IF WE DON'T HAVE SETUP (METHODOLOGY) ON WHAT ARE YOU GOING TO APPLY DISCIPLINE (PSYCHOLOGY) OR EVEN MONEY MANAGEMENT?
The following user says Thank You to smusa700 for this post:
The first step is to develop a system. It needs to be developed in a way where it's expected to be profitable in it's design.
Live forward testing, as well as gathering data, identifies any practical issues the system may have and increases your skills trading it. Any testing phase must be done with discipline to achieve a consistent sample of data.
The market sometimes suits a system and sometimes doesn't. Discipline is required to keep consistently trading the system. You shouldn't make changes based on a few trades. I like to have a sample of about 50 trades so I can make some meaningful assumptions from.
And remember live forward "testing" is just that - "testing". It should be done with a test appropriate trade size.
As far as finding a well-defined and proven method then i am afraid you won't find such a beast easily on any forum. On futures.io (formerly BMT) i have only seen two so far which passes the test in my opinion. CJbooth and Perry's methods but again there is no guarantee one will suit you.
Regarding the second point, i think you can only develop your ability to trade off feel as you say if you have a framework to which you can refer to in order to interpret price action within this context. You need to form or aquire some heuristic rules before you can develop this feel.
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