Understanding trading behaviour and discipline with Mohit Golecha!

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Understanding trading behaviour and discipline with Mohit Golecha!

“We do not have to be smarter than the rest; we have to be more disciplined than the rest”: Warren Buffett

We agree that trading is not as simple as it appears. What distinguishes successful traders from unsuccessful ones? What do successful traders do differently to benefit themselves? They possess - discipline, courage, and patience! 

Trading is a craft that necessitates a certain amount of discipline. You must not only follow a set of trading rules but also, be able to execute your transaction according to your rules & trading plans. The market will always put you to the test and in any trade, in which you grow overconfident, you will incur losses. 

Self-discipline entails the formation of a conceptual framework that allows you to remain motivated and focussed in the face of conflicts & mistakes. Self-discipline is not a natural attribute; it must be developed by grit and determination. If you get an opportunity to connect with a successful trader, you will notice that s/he is very disciplined and full of positive energy. 

Discipline is tough to develop but it is a required and an important attribute for any trader, who wants to become consistently profitable. It’s simply not enough to sit in front of the computer every day, make a trade, and hope for the best. You must have an objective or target in mind. Without a goal in place, you may become discouraged since you have nothing to strive for or work towards. 

Having a definite and measurable goal is the first step towards creating self-discipline since it will provide you with the drive to trade each day. Keeping a comprehensive trade journal is another wonderful way to acquire self-discipline. A trade journal can provide valuable insight into your progress towards your goal. It can help you stay motivated, track your progress, and determine whether you are improving. 

Another way is to make use of an analytic platform available for traders. It helps to increase the success rate of traders and investors. Such a platform provides deep analytics on trading performance so that traders can make corrections in their next trades; highlighting their true nature as traders and reinforcing their primary traits to benefit as well as avoid making the same mistakes in the future along with empowering traders with a rank that motivates them to improve. 

You know, there will be various obstacles and distractions. There may be many instances when you'd feel disheartened and want to give up, owing to a string of losses. The market will always put you to such a test. Just like a professional athlete, you need your passion and must be strong enough to conquer any obstacles that may come your way. 

A few elements to consider when developing trading self-discipline are:

Trading objective 

Setting a clear, attainable goal is the first step towards becoming a more disciplined trader. However, don't get too carried away while setting your ambitions. Do not expect to double your capital overnight by trading Bank Nifty Options. The goal must only have two characteristics:

It should be clear and realisable. 

It should be realistic and attainable. Set small goals and work towards them on a constant basis. Aiming for a 1 per cent gain per week or sustaining a 60 per cent win rate are two examples of reasonable goals.

Concentrate your efforts on what needs to be done 

You will be one step closer to becoming more disciplined once you have established a clear aim. 

For example, you may want to let your winners run while also protecting your profits. With this in mind, you should probably start using trailing stop-losses on your trades. 

Maintain a positive attitude 

There will be days when you get stopped out of three or four trades, and you may become impulsive & begin imprudent trading, which can lead to even higher losses. Remember that it's easy to get caught up in the market's whirlwind. 

This is why, it's critical to have something to fall back on, such as your statistics when little setbacks cause you to doubt yourselves.

Use losses to improve your trading 

Like other things in life, traders can always treat losses as a learning experience. The key is to accept that losses are a part of trading.  

It is not easy to accept and it may take time but the sooner you realise losses are inevitable in trading and come up with a positive way of learning from them, the better off you’ll be. 

The real bottom line is that trading is a difficult game to master. Only a handful of people become extremely successful at it. However, as long as they are ready to put in the effort, almost anyone can become a master trader! Authored by Mohit Golecha, CEO & Co-Founder, AnaStrat

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