If you are like me, your day is full of to-do lists and ongoing distractions that can take you away from your trading. Whether you are an active day trader or a part time swing trader, it can be very difficult to stay focused on the charts, but trading with discipline is paramount to success. From the time I get out of bed in the morning to the time I call it quits for the day, I am trying to juggle things like phones ringing, lunch meetings, and answering emails. Does this sound familiar to anyone? While all of these are just part of the daily grind, it is very important to eliminate these as much as possible while you are trying to trade. As we head into fall, it is a perfect time to review your trading rules to make sure you are ready for the stretch run.
I preach to my students all the time how important it is to exercise discipline with their trading approach. This includes things like having a trade plan or using proper money management. However, people often overlook eliminating the distractions during the time that they are actually trading. It is very important for you to establish the specific times of day that you are going to trade. For the active trader, this means blocking out a certain number of hours each day that you are committed to looking at the charts and nothing else. This way you can concentrate on reading the charts without trying to juggle phone calls and respond to emails. For the swing trader this means establishing a few times each day (same time each day) that you can get in to check your charts. Establish these routines so you can plan the other events for the day around your trading. And if you want to start trading cryptocurrencies, it’s best that you read this crypto.com review first.
For me the summer months are always extremely busy, which has limited me to swing trading exclusively. I knew I was going to be busy so I drew a line in the sand early on that I was going to come in at the same time each day to check my charts and manage any trades that I am in. While I am doing this, I have to set aside any other work that could potentially distract me. This means the phone is off or out of reach. This also means the email is closed down. As you can tell, these are the two distractions that I struggle with most, the two biggest threats to trading with discipline.
Some of you might be reading this thinking it is just common sense. The problem is sticking to these rules that you lay down for yourself. I can’t tell you how many times I have missed a trade or made a mistake with execution because I was trying to multitask. Just last week I was in the process of putting on a long position on Suncor only to login to my broker platform and buy a put option (which is a short position that is the complete opposite position I was looking for). I was on the phone completely distracted from the charts and made a really simple mistake. While I caught my mistake quickly and was able to limit the loss, I was still forced to pay the added commissions that were required to exit the incorrect position and put on the correct one.
For many traders, the excitement of making money often times leads to rushed decision-making. Trading with real money too soon. Trading a system without a proven trade plan in place. These are very important issues to deal with before jumping in with both feet. However, it is just as important to put rules in place for yourself after the initial research is done and you are trading live. Make sure you take some time in the coming days to review your trade rules that should be in place. Do you have the same time reserved each day to be in front of the charts? Are you making sure you eliminate distractions during these times? Are you reviewing your trades at the end of every session by entering them into a trade journal? If you can’t answer yes to all of these questions, then it is important to take a step back and establish new rules for yourself. Trading is hard enough without all of the distractions throughout the day. I can handle losing trades every now and then as long as I’m sticking to my system and trade plan. What I can’t stand are the trades that I miss or make a mistake on because I’m not completely focused on the charts. The disciplined traders are the ones that are able to stick around for the long haul. Make sure you are taking the necessary steps to become one of those traders.