Michael Phelps isn’t the tallest swimmer, nor was he the most athletically gifted person to win Olympic gold. However, he remains the most celebrated athlete in the history of the Olympic games. Phelps has won 23 gold medals, more than double of anyone else (Mark Spitz is second with 9).
According to his coaches, Michael Phelps is the most disciplined athlete to compete.
And you know what?
Whether you want Olympic gold; a six-pack by summer; or to become a consistently profitable trader… you’ll need discipline to achieve those goals.
And with more than 250 trading days in the year…your discipline is bound to get challenged at some point…
It did for me recently.
My trading performance hinges on being focused on the markets and waiting for my setups. Also, using what my former student Kyle Dennis calls “profit buckets.” Profit buckets are your bread-and-butter strategies, whatever the case may be. For me, chart patterns and catalysts work, so those are my profit buckets. Now, if you want to learn more about profit buckets and what they’re all about, check it out here.
You see, between August and November, the Russell 2000 crashed 16%, but I was able to generate hefty profits by buying small-cap stocks.
While the Russell 2000 was getting decimated, I was able to put together $161,124.58 between late August and the end of November.
Now, here’s what focused and disciplined trading looks like:
I was making good decisions and waiting for my proven setups before entering trades. The results speak for themselves.
Now, if you’re asking, “How can I learn your trading process and try to outperform the market?” Well, check out how I’m able to use three patterns, as well as value and catalysts, to consistently beat the market.
You also might be wondering, “Jason, that’s great that you can remain disciplined…but how can I start to be more disciplined?”
Well, there are many ways to remain disciplined and patient in the markets.
What I like to focus on is:
- Patterns and waiting on the right setup. For example, I was stalking Veritone (VERI) for some time and it wasn’t until the last day of November to see my pattern.
Here’s what I alerted Millionaire Roadmap (MRM) members:
By the time I woke up that following Monday, I was locking in $26K profits in VERI.
Now, if I didn’t waited for my setup in VERI, it could’ve ended up being a disaster trade. That said, when you look for your setups, it helps to remove the noise and focus on your profit buckets.
Here’s another look at what waiting for the right setup will do, with a real-life example in Apple:
You see, while traders were trying to pick a bottom in Apple Inc. (AAPL), I was on the sidelines…waiting for my sign to let me know when to buy. Had I not been waiting for my A+ setup, I probably would’ve gotten chopped up pretty bad in the stock.
- Respecting loss limits and outs, and evaluating trades.We all make mistakes…but when you make mistakes, evaluate your trades in detail, to stay disciplined.
When you’re reviewing your trades, ask yourself:
- Did I have a plan?
- What was my edge?
- Was this an A+ setup?
- Was your thesis right, or were you dead wrong, but continued to hold onto your trade?
- Did I stick to my plan?
These are great questions to answer before your trade too.
What happens when your discipline slips?
It happens to me sometimes. The best thing you can do is try to learn from it.
For example, I made a mess and lacked discipline with my trades one day…but I didn’t just continue to trade. I have a mental loss limit, and I will stop trading if I get close to it. If I don’t respect my outs and loss limits, that will impact my discipline and potentially push me to go on tilt.
Now, I reviewed my trades and came to the conclusion I lacked focus for a few days. I realized my trading was sloppy…and when you’re wrong, you have to just cut it, rather than hoping the losing trades will miraculously fix themselves.
- Having targets.Here’s what I send out to MRM members when I spot my patterns:Notice, how I have targets in all these potential trades. When you don’t have targets, it’s easy to hold onto a stock, thinking it can go farther. In turn, you might give back profits, or worse – turn a winner into a loser.Having targets let you know where you should be taking profits, allowing you to be disciplined with your trading.
As cliche as it sounds, you need to treat your trading account like a business. Milk what’s working and eliminate what is not. That said, you want to review and make sure you stay disciplined. With more than 250 days in the trading year, we all will slip from time to time, the difference from successful traders and those who are not, the successful ones stay disciplined the majority of the time.
The diary of a real $ trader,