The Disciplined Trader

A New Way of Thinking

Most people who begin to trade do not know that habits and beliefs, which have served them well in the outside world, are likely to become stumbling blocks in the trading world. Trading requires much more self-discipline and self-control than many other activities.

The markets do not have the power to force you to act one way or another, any more than you have the power to force the markets to act in any particular way. As a trader, you are your own boss, completely free to make your own decisions. Moreover, you have an almost infinite opportunity to gain or to lose. Many people suffer disastrous losses, psychological pain, and enduring mental or emotional scars. They may respond to such experiences by rationalizing, denying or justifying what they have done. These responses, in turn, color their perceptions of the market and may lead them into a continuing pattern of bad decisions. The mismatch between their perceptions and the market’s realities may grow until the market forces them to face facts.

The most important fact is that although you cannot control the market, you can control how you think about it. Self-control, emotional restraint...