Why being a Disciplined Trader is your Number One Responsibility?

James | Oct 30, 2009 | Comments 20

“A man’s errors are his portals of discovery.”

This quote is very meanginful to me after this harsh week of trading. I became a casulty of the market and bought into the hype that we would continue to go higher and a setback was not possible. I am the first to admit, ultimately this week I screwed up.

What was the result? My portfolio dropped 12% losing a little less than half of my October gains.

What went wrong? I became undisciplined and went with the flow of the markets. Over this summer I created a stringent list of principles/rules that I would follow while trading. The main thing I stressed was discipline and selling at key points in time. This week, many of my positions flared up huge sell signals yet I kept buying into the analogy that the markets would continue to rise. I am the first to say that I am not perfect, however when it comes to trading the most important chrasteristic you can possess is being Disciplined. I can’t stress this enough, discpline is the biggest part of the game. Follow your principles and don’t get greedy. Ultimatly thats what I was, greedy. Some of my picks are up over 50% in less than 2 months. Thinking that they would continue this streak of success was juvenile especially with the economic challenges that still lie ahead. So how do I move on from this? In this case I want to quote Winston Churchill:

“Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit. In life, all men make mistakes, the wise men learn from their mistakes.”

How to Build off this Experience? I want to build off this experience and become a better trader from it. Currently, I am still only in my 5th year of trading. If I can manage to make these mistakes at a young age it will greatly benefit me later on when I move through the industry. These same experience might relate to many of you and feel free to share your screw-ups in comments below.

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Filed Under: Featured

Tags: Brokerage Account Screw Ups • Disciplined Trader • Stock Failures • Trading Mistakes

Frank Sever

Discipline is the most critical step to becoming a top trader
Greg M

Yeah man this week was hard for me also. I took my biggest loss on monday I 8 months. It hurt so badly.
Hate to say it, but im almost glad I wasnt alone. Shit is discouraging as fuck.

http://stocksonwallstreet.net James

So discouraging but you can’t get down gotta forget about the losses and move onto the next day. Just look at this week, market has soared my account is up a lot so all is good.
Frank Sever

You win some you lose some just never give up

http://stocksonwallstreet.net James

Good point just got to keep moving on and forget about the losses

http://voicedup.com/ thevoice@voicedup.com

The pace of this recovery is hard to maintain, the 3.5 GDP growth was mostly due to government spending. Higher earnings came from cost cutting not higher sales. Pending home sales are up for the eighth straight month…new trend is forming….place trades accordingly.

http://stocksonwallstreet.net James

Exactly I have been investing in strong sectors not the market in general.

Frank Sever

Good points economy is weak so look at sectors

Mike Thomas

Nobody’s perfect at least you can admit when you screw up, shows lots of character.

http://stocksonwallstreet.net James

Thanks Mike

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http://RandomChatter.org Alex

[quote]The main thing I stressed was discipline and selling at key points in time. This week, many of my positions flared up huge sell signals yet I kept buying into the analogy that the markets would continue to rise. I am the first to say that I am not perfect, however when it comes to trading the most important chrasteristic you can possess is being Disciplined. I can’t stress this enough, discpline is the biggest part of the game. Follow your principles and don’t get greedy.[/quote]

It means having more control by making the right choices and not to ignore the signals in which the product/services sends.

http://RandomChatter.org Alex

This is being responsible.

http://stocksonwallstreet.net James

Thanks Alex, hope next week turns out better

John

Keep at it James we all know you can trade and invest from your picks so I’m almost positive you’ll tear it up next week.
http://RandomChatter.org Alex

I have to commend you for writing this article.I thank you for sharing your experience with us.This makes you a good person showing leadership qualities.
I wouldn’t call it a screw up.The situation as a result didn’t work out for you.
You stumbled to the ground, what do ya do ? Pick yourself up and move on.
You find new products and services to invest.
This week you presented gains in your other investments, a two part series.I may say they are impressive.You made sure we got in the action.
We are looking forward to the Stocks on Wall Street Fantasy extravaganza.
James…there will be more.There are products and services wearing the mask of positive gains,a inflated balloon (OK,bad timing,it is Halloween).The masks comes off,the balloon over time will deflate(negativity,loss of gain/profit).
James…I know you will move on.
Betcha by Tomorrow(Saturday) you again will find new products/services to invest.
Finally I want to say Thanks and keep up the excellent work !!!
http://stocksonwallstreet.net James

Please feel free to share your mistakes or failures throughout your trading/investing career.

Mao

The biggest mistake I made was speculating on earnings release. Twice I was being bullish on the stocks I liked and twice suffered tremendous losses (NTES: down 75% and BIDU: down 95%). Sure won’t let it happen again.

Frank Sever

Wow thats quite a fall Mao, no protection?

http://stocksonwallstreet.net James

Mao did you use stop-loss orders?

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