How to Maintain Control and Discipline in Your Trading

By | August 14, 2017

Outta Control

Again, it’s all about control. Our human minds desire consistent, predictable, expected results. Not sometimes, mind you. Every time. We like to know that the sun will rise tomorrow. We like to know that 2+2=4. We like to know that water runs downhill, and a hot stove will burn us if touched. We like to know that every single trade we take based off criteria that creates our respective approach = similar outcomes. It’s all about building a belief system, which is based on constants = control. Both words stem from the same root of “con” for a reason. Only when we think we’ve found consistency with constants as an equation, we build confidence thru feelings of being in control.

Which is exactly why we do not like the fact that each individual trade taken from the same criteria for decision has random results. We do not like the fact that at times several of those trade decisions in a row will have failed results from our favorable expectations. So guess what happens then? Can you guess? Do you already know?

Our human minds desire consistent, predictable, expected results so badly, so deeply that we lean on fear & doubt to create a new belief system. The confidence in an expected successful outcome is replaced by confidence in an unsuccessful (aka failed) outcome. In both cases our confidence = control is exactly the same. Regardless of how it all turns out in the end, we have an ingrained need to expect = predict = know ahead of time. Anything other than structured control skews our natural desires. The less secure a trader is with first himself, secondly the market and lastly the method or system, the faster that mental switch from positive to negative expectancy occurs.

Protectionism Prepared

Deep down in our subconscious mind, we have no care at all whether trades win or lose. Our real desire is primeval. We want to know the expectancy of outcome based on what is known to us already. That’s just our basic survival mechanism at work. Is the pretty colored snake in our path harmless or deadly? Is the next time(s) we risk our money to the market going to be painful or pleasurable? We’re wired for a deep need to know these things ahead of time so we can avoid that which is harmful. That’s pretty critical information to have before dealing with the snake. Positive identification can result in 100% correct sequence of identifying venomous from benign critters to steer clear of those which we should. Real handy to know, for sure. But no one on earth can ever know the outcome of each individual trade taken until the benefit of hindsight has evolved.

Too many traders have no idea what’s going on in their minds when markets are live, charts are streaming from the hard right edge of great unknown with real money at risk of being risked on the next trade taken. Figuring out what makes me tick and what makes you tick is a critical, essential part of trading success. These are not empty rhetoric words here above arranged to simply fill space in a website magazine. The stuff we’re talking about here is critical, is vital to your success or failure. Every day of the week, countless traders having an operable edge in their market fail to manage & execute correctly. They find themselves paralyzed at the opportune time to enter (trigger shyness). They find themselves entering once the prime opportunity (chasing an entry). They find themselves haplessly clicking in orders against their well-crafted trading plan (impulse trading).

When the dust settles after those closing bells ring, these failed traders look back in hindsight and clearly see every single thing they did wrong. Do you know why they can see clearly after the fact where no visibility existed at the time? Did the bars magically change form on their charts when the day was done? Or were their deciding mental factors limiting the ability to see = react = respond correctly?

 

 

Summation

Real traders have net-loss trades. Real traders have net-loss days. Sometimes weeks, once in awhile months. None of that has anything to do with long-term successes. Consistent, methodical trading is not about trying to figure out what the market is going to do at every wiggle & twist using logic or reasoning power. Consistent, methodical trading is accomplished by knowing which specific setups = a high odds tipping point on the chart. Using that knowledge to apply action at the proper time, not too early or too late for entry, not too crowded or too loose an initial stop, not too small an average profit or too large an average loss all stems from confidence. Correct confidence stems from realistic expectation. Reality is, we have no control over any individual trade’s profitable outcome. We can control loss to reasonable extents within our overall approach. We can control wins by letting each trade have benefit of favorable expectation instead of unfavorable doubt. That keeps us from cutting profits short while letting losses run.

Don’t try to be perfect. Don’t even expect to come close. Don’t try to figure out every wiggle & jiggle on the charts. Don’t try to win every trade, or even prevent every trade from losing. Trying to prevent every trade from losing will likewise result in net-loss overall. Do work hard to study your approach, learn its nuances thru all market behaviors and build your inner belief level to its highest degree possible. Any attempts at short-cuts there leads to short-circuited trading careers.

10 thoughts on “How to Maintain Control and Discipline in Your Trading

  1. Bramesh Post author

    Its from my archives which my Guru gave me to read once in a week.. it did not have author name mentioned so unable to write. If you know share with me will add it

  2. Sachin Jain

    Brahmesh: Not to sound police like.. but i didn’t see credits given to original author or source .. and its pretty evident that this is not your style of writing !!

  3. Subbu

    Dear traders and Ramesh ji,how are u doing ?? Very much helpless and disappointment if Ramesh ji doesn’t provide his Bnf and nifty analysis over blog but what I feel is.. how long Ramesh can post the analysis and how long we depend on… we need to come with a system and our own style of trading…all the time Ramesh won’t be with us to guide…let us inculcate to develop own practise…we would be very glad if Ramesh continue to post his analysis. Thanks

  4. RAM SINGH

    It was really unexpected moment when you didn’t posted banknifty and nifty daily level.please do it regularly.

  5. RAGHUNAND V N

    Sirji, You decided to stop NF/BNF daily blog? So many are dependent on it. Please continue. Thanks!

  6. Jeejan

    No bn and nifty analysis from Monday why sir… It’s really helpful please post the same

  7. DARUN

    Bramesh ji ,

    EOD nifty , bank nifty and week end analysis updates plzzz .

  8. Saurabh jain

    Sirji, what about update on Banknifty and Nifty? No update for Monday 🙁

  9. Vipul

    Amazing article. I encounter all of those (trigger shyness, chasing an entry, impulsive trading) and in hindsight it all becomes clear. Mind control is the first most important factor in trading. Thanks for sharing.

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