Emotions are probably the biggest obstacle any commodity trader has to overcome.
Many traders become losers because they are not able to follow a PLAN. They experience a couple of losses, start panicking, abandon their plan (if had any) and start to take wild shots at the market.
Those who develop a set of sound trading rules and then stick with those rules, increase their chances of becoming big winners. Trading discipline can be more important than your trading system.
DISCIPLINE means you must become mechanical in making trades when certain price action occurs. You must shut out emotions and not accept one trading signal over another supported by what your spouse thinks about the markets. Disciplined traders let profits run and keep losses short by following rigid guidelines.
Now, DISCIPLINE doesnt mean you will have perfect results 24/7. If you have selected a diversified portfolio of markets, you know that you can expect losses in some commodities.
Yet, being disciplined forces you to trade that whole portfolio and keeps you from secondguessing your system. If you have a trading system that is proven successful, discipline may be the only thing you need to get profitable results.
Now these concepts they all work together; you cant have the right trading system and no discipline, you cant select the right trades without the working system and you cant diversify without having adequate capital…
By using sound money management techniques, you can spread out your risk and start getting real results, year in and year out – the approach any new trader should take toward this great biz.
Good trades,
Tom out