Almost any trading method will require discipline to be successful. If we can’t follow the rules, what is the point of creating the rules? All of us know that we have to cut losses, trade less, have a risk management plan, and do homework, but without discipline it is impossible to put together all these tools and become a successful trader. Discipline is what ensures that all those things are carried out, and it is probably the single most important tool a trader needs. Discipline is needed in every aspect of trading and should be high on the list of what traders have to work on. Everything one does will be done better if one has discipline.
The following few facts show the importance of discipline:
1. Most successful market professionals achieve success by controlling risk. Controlling risk goes against our natural tendencies. Risk control requires tremendous discipline.
2. Most successful speculators have success rates of 35 to 50 percent. They are not successful because they predict prices well. They are successful because the size of their profitable trades far exceeds the size of their losses. This requires tremendous discipline.
3. Most successful conservative investors are contrarians. They do what everyone else is afraid to do. They have patience and are willing to wait for the right opportunity. This also requires discipline.