Discipline has always been one of my biggest challenges all my life. I'd start something then let it sit 95% done. At one time I was 4 years behind in filing my income tax returns. Only after I got a bill from the IRS for 45k did I get going and get the returns in. I never knew why my discipline was lacking...it just was. Last year, one of my kids was diagnosed with ADHD. My wife got books on it and as part of the treatment process, both of us had to do a questionnaire. It turns out that I have ADD. I never knew it, but it helps explain some things for me. To overcome my discipline problems, I've been programming my life to achieve the results I desire. For instance, a couple of months ago I was about 30 pounds overweight and knew I needed to workout to improve my health. I knew if I just got a gym membership I wouldn't go, so I had to create a system to get me to workout. I decided to get a membership and buy the personal trainer services to meet me at the gym at 5:30 am Mon.-Sat. If I didn't show, I'd get a phone call that would wake my wife. That was enough motivation to get me to the gym everyday. I didn't need the trainer, but I did need to be accountable to keep my lazy side in check. I've nearly eliminated the 30 extra pounds, so my immediate goal is just about achieved. In trading I do things in a structured way. I follow the same process everyday. One problem I had years ago was that as I was stalking a trade, I'd have other things I needed to get done pop into my head and distract me. Sometimes I'd miss the entry into a great trade as I tried to quickly take care of the item. In 1995 I met one of the wizards from the Schwager books and told him about this problem. He told me he used to have it and to get rid of it, he took out a sheet of paper before the trading day and listed all the things that he needed to do. If something new came up he'd put it on the list. When the market was dead he'd work off the list. When he stalked a trade he could devote 100% of his attention to the trade. I began doing it and it eliminated the thoughts jumping into my head just before a trade. Knowing I had a list was enough. I few years ago I had a problem of getting into trades too early and losing some money for no good reason. To eliminate this habit I made up envelopes with the address of a charity and a printed letter advising the charity of my donation. I kept the pile next to my screens. At the end of each trading day I'd do a postmortem on each trade. If I decided I entered a trade too early, I'd pull out my checkbook and write a check to the charity and mail it. After about two weeks this problem stopped. I didn't like writing checks so I used it to improve my discipline. I've found that programming my life in this way has improved my discipline greatly. Anytime I want to conciously achieve a goal, I figure out how I can setup a process so it would be hard to fail. Anyone else have a suggestion they'd like to share?
Yes, charity helps in this way. It's even better to give charity on a REGULAR basis, then You'll automatically stop any failures. AT every trade You'll think ' No matter how good the trade is going to be I will have to chop off x%'. Trading is VERRRRY exciting, giving charity is endless BORING, so You get some balance ... ttrader
Regular giving to charity used to make sense. Since the introduction of the Itemized deduction limit (of which charitable giving is included), it no longer makes sense. I used to give a organization $1,000 and get about a $500 deduction. Now I have to make $2,000 to give $1,000 to the organization and $1,000 to federal and state taxes. With that kind of tax treatment, I figure someone else will have to give their "fair share". Mine is at the treasury.
Very interesting subject. Discipline makes or breaks your trading imo. I am awfully indisciplined also (especially in trading). Fortunately I am still able to squeeze out a little money now and then. I don't have any particular methods for instilling discipline, but I find I do better when I am highly motivated. So I try to motivate myself by setting adequate short, medium and long term goals. Also I wonder how long it takes for somebody to "learn" to be disciplined
With tax the problem is, it doesn't count to the psycholovical effect ... you somehow have to imagine the money never was yours ... kinda 'government' saying 'Look, this is yours' and then ' no it isn't'. I mean - this is synonyme for PERFECT torture ... ttrader
I work with a note pad at my side and write my thoughts down as I go. The mere act of writing things makes you think about them too. When you have a thought process that is outside of your plan, you write it down and it jumps right out at you and screams this is not part of the plan - don't do this. I can also see later what my thoughts were at any given moment and why they occured. Slowly I learn to filter out those incorrect and undisciplined thoughts from my trading and stay much more focused on what I should be doing. When I look back at notes from some time ago, they are riddled with mistakes and off plan trades and thoughts, that only occasionally seem to happen now. Every now and then, a new problem crops up which needs attention a needs to be overcome. (maybe I didn't know about the problem and it was always there, but obscured by the one in front of it?) But with the notes it is easily identified, and once it is, it jumps out of the page at you and screams in your ear - "I'm waiting - go on - make this mistake - I dare you to do it" , and when that stage is reached, the mistake is licked and won't be a problem any more and so on to the next one. Works for me. - constant self monitoring. Best Natalie
I do the same. I write down a lot of stuff. However, particularly when I'm really busy, (i.e. scalping) I tend to use an electronic notetaker. At the end of the day, I review all my notes. Listen to what's said, listen to the tone of voice they were said in, which helps enormously with recognizing the mental state during the note as well; fear, greed, lack of discipline, lack of focus, whimsical, relaxed, hasty, indecided - you name it. And you can keep your eyes on the screen. Then I write these things down as well and my comments regarding them. I find this helps enormously with honest self-examination, since I have no excuse not to take a note. After all, constant self-evaluation is the most important factor in succeeding in this business. We really must have an edge. Try the notetaker. Works extremely well! Have a nice Day, ~The Scientist
I do that too Natalie... constantly... made me laugh reading your post.. I bet your notes are nowhere near as full of vitriolic and coarse self abuse as mine tho! lol I read back on my notes and cringe sometimes.. which is now actually reducing the amount of swearing at myself lately.. I think perhaps I am becoming slightly more balanced.. once upon a time I took every bad trade personally and lambasted myself for arrant stupidity.. now I take a moment to consider my own reaction at a later date to my present emotion and try to restrain myself from such exsessive reactions.. I really did used to curse more in my notes... maybe.. just maybe.. I am learning slowly.. self discipline.. is that what its about? not swearing at yourself too much? lol Neil