Discipline in sticking with one’s trading plan is always important.
The question I would ask is in those weeks where you hit your target early (I have some concerns about those targets, but that’s for another discussion), why shut things down? If you get more good trading signals, why not take them?
I think that to be successful you need to have good discipline, good money management and risk management skills and a decent strategy. All these factors need to work in conjuction, not any one of them can bring success by itself.
Terminology is an interesting aspect! People use the same terms but they do not always have exactly the definitions for them
You are, of course, right that a good trading plan is also necessary, but a “trading strategy” as you mentioned earlier, in my definition, includes both a trading method [I]and [/I]a trading plan. In fact, one could maybe say that a trading strategy in its broadest sense [I]also [/I]includes risk and money management.
Another term which is used even more loosely is “percentage gain” as a measure of profitability. Percentage of what exactly! If it is percentage of account balance then it is totally arbitrary and meaningless and a totally useless yardstick for comparative purposes since the balance traders retain in their accounts is entirely a personal matter beyond the minimum to cover trading margins and buffers. To measure monthly profit as a percentage of account equity means nothing - but it is quoted all the time!
I actually think most folks would define those things the other way around. Trading plan is the broad concept. Strategy or system is the specific entry/exit approach.
Another term which is used even more loosely is “percentage gain” as a measure of profitability. Percentage of what exactly! If it is percentage of account balance then it is totally arbitrary and meaningless and a totally useless yardstick for comparative purposes since the balance traders retain in their accounts is entirely a personal matter beyond the minimum to cover trading margins and buffers. To measure monthly profit as a percentage of account equity means nothing - but it is quoted all the time!
Totally disagree. When we talk in percent terms it basically always implies a basis on account balance - including risk %. This normalizes things across traders. A 10% return for you and me may be different $ amounts, but we both know what it means for us. In contrast, a 100 pip gain means very little. It doesn’t provide any context in terms of risk.
This is precisely the contradiction that makes quoting percentage gains totally arbitrary and meaningless. It does not “normalise things across traders at all”.
If Trader A and Trader B do exactly the same trades during a month but trader B has twice as much equity lying in his account then their results are identical in both monetary terms and in the risks they have assumed. But their percentage results for the monthly are entirely different and are therefore completely meaningless for comparative performance measurement.
It would make sense if the equity balance would be somehow related to the positions taken, but it isn’t. The amount that a trader retains in their account is entirely arbitrary. ALso, some traders spread thei total equity across two or more accounts, in which case the decision as to what balance is the basis of percentage is even more unclear.
Discipline is a must on trading. If you plan to trade once a day, then once you get out from the market, do not think to trade again even if your lose or with big win. Do not even think to make another big win or recover your losses for the day. Always happen, when people win, they always want to trade more and more and at the end, the big win before end with losses and the small losses end with even bigger loser.
Yes indeed, sadly one doesn’t get to such a conclusion easily haha
Back to OP, yes indeed discipline is key to surviving the market at least, but in order to survive the market, keep your account, and making profit, you need more than discipline. Other members in here posted good replies regarding discipline + risk management + trading plan, etc…
I’ve been there and I’ve done that - trying to compensate for losses, I mean - and I agree, it’s not easy. Nor is it adviseable. One’s already emotional and making mistakes because they’re not thinking clearly, and then those mistakes compound each other.
To some extent yes but I totally disagree with greed being good in most cases, reason being once some new traders assimilate greed being good they will turn to overtrade and might incur more loses .
Going right back to the start of the thread, the discipline to follow the rules of your strategy is essential. But a rule that defines the strategy’s success as a return per week in cash is just irrelevant. You might as well have a rule that says stop trading when it gets cloudy - it is not a rule derived from trading, TA or fundamentals, it will not sustain your success.
I also believe it’s good to not “screw everything up in one day”. If the deal had to be closed or close on the stop on it’s own, it’s better to not open any new deals that day at all. and not only with that pair, but in general.
Well Mike18 and dianajs, I understand what you’re saying - stepping back from trading for the rest of the day / week etc. removes the emotion, prevents revenge trading, breaks the compulsion to be in the money by the end of the session etc.
But if you have a well worked out plan and followed your plan, there is no error. The losing trade was just one of the inevitable statistical incidents of a trade going against you. If you made no error, keep trading, just make sure you followed your plan to the letter. Changing the plan in mid-session (or mid-week for longer-term traders) is just asking for a knee-jerk revision - best left for a weekend or a day off or a week off.
Help yourself by emotionally detach from money you trade. Focus on trading process. Or if this help, enter a trade, set the targets and close your platform