Building a Disciplined Trading Approach

Abstract

The mastery of trading is a never-ending pursuit. Knowledge of and confidence in a workable methodology is just a departure point. Consistency in the approach and application of a particular technique will be the real key to a trader’s success. So, though initial market and trading theory is important, it is not until a trader attempts to put actual technique into actual practice that the real learning begins. All methods begin with the laying down of structure and rules—however, these are ultimately meant to serve as guidelines. A newer trader will do best to follow these guidelines as closely as possible and, in doing so, should meet with a modicum of success. As a trader develops more expertise, he or she will be better able to recognize when certain market conditions are changing and when “rules” can be given more flexibility. If a trader’s bottom line starts to suffer, though, he or she would do best to go back and follow the guidelines and rules as much as possible. Self-study is just as important to successful trading as is the study of price behaviour or technical analysis. Traders must maintain an even temperament, an orderly composure, and a calm mind. They must have the confidence to believe in their own trading decisions without looking to outside sources for validation or confirmation. Dedication, persistence, and patience are required for success and, ultimately, mastery.