In the Webster dictionary, the definition of ‘Discipline’ is ‘teaching, learning’. At Millennium-Traders our definition of ‘Discipline’ is doing something you don’t want to do or doing something you feel you don’t really have to do and as a Day Trader, if you lack ‘Discipline’ be prepared to lose a lot of money.
Taking a Stop Loss is part of ‘Discipline’ for a Day Trader. No one likes to lose money however; when you are Day Trading if you don’t believe that you will lose money, you should close this browser window down right now and forget about Day Trading.
When you are a Day Trader you will lose money. One of the key issues with successful Day Trading is that you have the ability to control what money you are willing to lose, to a point. The reason we say to a point is that, under certain market conditions, exiting any trade can be very difficult.
Before a Day Trader completes any trade to enter a position they should know in advance what their Stop Loss will be and place their Stop Loss or Trailing Stop on that trade, as soon as the order fills. Trades will turn against you and if you are not prepared, again we repeat, close this browser window down now and forget about Day Trading.
Prior to any Day Trader making any trade they should know what their Stop Loss is and load it or their Trailing Stop Loss on their broker’s platform.
Rule number one for ‘Discipline’; know what you are prepared to lose on any trade before your order is filled. Does it hurt to lose money, hell yes it does but, learning to control your losses by using a Stop Loss or a Trailing Stop Loss hurts a whole lot less than losing an undetermined amount of trading capital. Any one who says it doesn’t hurt to take a Stop Loss or that they never took a Stop Loss is lying. Key point, having the ability to control the amount of your loss again, to a point.
By setting your Stop Loss or Trailing Stop as soon as you have an order filled, you began the process of controlling your trade or maintaining the ‘Discipline’ of a trade. Remember, under certain market condition, a Stop Loss may not get filled so, you must be alert to market conditions at all times in order to change your exit position if the price blows by your Stop Loss.
‘Discipline’ by a Day Trader while Day Trading is:
· The ability to take a Stop Loss and refocus on the next trade.
· Controlling your emotions regardless of making a Winning Trade or taking a Stop Loss.
· Protecting your profit.
· Switching to Demo Mode/Paper Trading when you get in a trading slump or you are on a trend of making bad trades; everyone has these trends, you simply need to learn how to deal with them appropriately.
· Evaluating and analyzing your trading performance on a daily basis, trade by trade; look at the good trades and the bad ones for what you did right and what you did wrong.
· The ability to hit your daily profit goal on one trade and log out of your trading platform for the day.
· Switching to Demo Mode/Paper Trading or logging out of your trading platform for the day after you either hit your Daily Profit Goal or your daily Stop Loss goal.
· Exiting a position because you hit or surpassed your daily profit goal into the run and not when the run was done.
· Closing your last position for the day, you’ve hit your daily profit goal and you can turn your platform off and go fishing, golfing or what ever you enjoy doing, for the rest of the day.
· Protecting your trading capital by exiting all positions at the end of the day, even though you missed your daily profit goal.
· Protecting your trading capital by exiting all positions at the end of the day, ‘Cash is King or Queen’, even though you think a stock you played or watched during the day may go in one direction or the other after regular trading hours.
· Realizing that it is foolish to attempt to duplicate the Moderators calls for the day or your trading buddy’s trades for the day.
· Realizing that you must create and focus on your own day trading strategy, not try to mimic some one else’s.
· Following suggestions that our Team of Experts suggests to you during a One-on-One Training Session.
· Not chasing a trade after it began to move and you missed your anticipated entry price.
· Setting up a separate trading account if you want to Invest that is totally separate from your Day Trading account.
· Not using your Investment account for those bad trades, that is what a Stop Loss is for.
· Not averaging down.
· Maintaining your computer: utilize a quality anti-virus software, clear cookies/cache at the minimum of once a day depending upon how much web surfing you do, defrag at least one time a week and keep your work area clean and uncluttered.
· Never make a trade based on Hope.
· Refraining from trading while under stress or during an emotional time period in your life, remember you have tomorrow.
· Never ever walk away from your computer or trading platform with an open position.
· Allow no disruptions during any Trading Day.