Many times during your trading you would have not followed your trading plan and made loss or missed a Big Rally. During my Training Session when i Interact with many traders will admit they made a Big loss or Missed Big Profit when they stopped following there trading plan and started doing trading based on Intuition or Impulses.
Perhaps the most common concern I hear from traders is that of “discipline”: following one’s trading plans, rules, signals, and/or system. Sometimes the lapses from discipline involve failing to take trades that are indicated. Other times, the problem is one of overtrading: taking trades that lie outside one’s rules.
As a trader you Know following my trading plan is only Key to my trading success but still you fail to follow your trading plan. Lets understand today what stop us from following our trading plan and how can we improve our trading habits to follow the plan religiously.
There are many factors that could contribute to your lack of discipline to follow your trading plan. Depending on your personality, background, training, and experience with the markets, you may have trouble controlling your tendency to act on impulse.
Most Important reason I found out with my working with traders over a period of time is Traders are unable to CONCENTRATE .
They have trouble concentrating. They are easily bored. They look for quick thrills for relief. Lets understand few cased when traders lose their concentration
Temporary setbacks are part and parcel in trading. When the extremely emotional trader encounters one of setbacks, he or she becomes overly distressed lose out on his concentration, and may close a position early, or in a fit of frantic, make a major trading mistake that can only be fixed by closing the position.
A lack of confidence in the trading plan leads some traders do not follow their plan when they think that a trade will not work out. The result is that you end up taking trades that are just based on simple intuition and not on statistically proven probabilities of success.
No trader is perfect; any trader can be impulsive at times. Research has shown, for example, that when people are tired, they have difficulty concentrating. As much as your conscious mind cares about sticking to your trading plan, your unconscious mind thinks, “Who cares? I just want to get this over so I can chill out.” When you push yourself to the limits, you’ll have trouble concentrating on your trading plan and obeying it. Thats Why a trader need to Sleep at least 6 hours in a day.
Lack of trading experience also is one of the reason for losing concentration. You can’t expect to stick with a trading plan when you don’t know what you’re doing. If you’re new to trading , you’ll lack confidence and feel uneasy. Thats why a trader should paper trade and trade on small trading capital till he have full confidence on his trading abilities.
Disciplined traders stick with trading plans. Trade with full concentration and follow there trading plan by controlling negative trading urges.