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life. As in everything, if you start taking small steps, before long you will be taking large strides. Discipline also allows you to control how you represent the events that occur in your life. Discipline improves your perceptions while trading. Discipline allows you to disengage, to ignore your ego and emotions, so that you can see the market accurately. Discipline is a virtue and as such it thrives when its importance is acknowledged and encouraged. A trader with discipline is able to maintain her equilibrium when the markets are so choppy that most traders are being badly chopped up. As your level of discipline increases, the amount of control you have over your ego, your level of faith, and your confidence will all begin increasing as well. |
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The most difficult concept a trader must acknowledge is that the markets are not predictable in an absolute sense. A market can drop in price all the way to zero, and go up to infinity. You need to realize that when you are looking at a chart and deciding that it could be a particular pattern (a double bottom in our example), you are basing that observation on past price history. When you are trading, you must be focused only on the instant of time that you are trading in. In other words, if you are day-trading on a five-minute bar chart, you must be totally focused on what the market is doing right now on the five-minute chart. You don't care one iota what it did five days agowhether it made a high or low. Always ask yourself what the market is doing right now. What is the continuity of thought right now, in this instant of time? Staying in the moment requires a great deal of discipline. |
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Discipline is the third virtue of trading. Before you can begin to have discipline you must have begun to master the other two virtuesfaith and confidenceand to master your ego. As your natural ability progresses, your discipline must be based on solid beliefs. A lot of the internal pain, frustration, and anger can be removed by acknowledging that you are a disciplined trader, and that the markets are totally undisciplined and unpredictable. |
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