(Chapter taken from "The Currency Trader's Handbook" - see synopsis at end of thread)
Have you ever exited a trade at a loss, only to find that the trade would have been profitable only a little while later?
Have you ever exited a losing trade, opened one in the opposite direction, and then lost twice?
I have. I used to make those mistakes and many others.
Have you ever not stayed in a trade long enough to get the full amount of profit from it?
Discipline is the answer. Disciplined traders succeed and undisciplined traders fail. It’s really that easy.
This isn’t a chapter about currency trading, though – at least not directly. It’s really about how you can learn to acquire greater discipline in your life, which will make you a better trader (much better). In fact, I promise that this book will make you a better trader, as long as you’re willing to give some of my advice a try. Once you’ve acquired greater discipline in your life, I’ve got a bunch of forex trading strategies that you can use (or you can find many, many others elsewhere). But none of those strategies are worth anything without discipline, because…
(There is a longer version of this chapter available at the following internet address: http://www.robbooker.com/Miracle_of_Discipline.pdf )
I have read just about every trading strategy book out there – and hundreds of self-help books -- and all of them have impacted my life positively. I’m a better trader for having read them. However, for much of my life I struggled with a lack of discipline, and as long as I struggled with discipline, I was always almost successful at whatever I tried. In the end, I was left with mountains of good advice and without the discipline to implement all of it consistently. After hundreds and hundreds of conversations with traders and successful people across the world, I realized that I wasn’t alone, and for many people, the only obstacle blocking the path to trading profits (and other important accomplishments) is a lack of discipline.
My successes and my failures can be traced to the presence – or absence – of one human quality: discipline.
Having perfect discipline – not perfect strategy – is the key.
This book is about how to become a renown trader. Not just a good trader. But one of the very best. Not just a few thousand dollars per month. I want you to be a millionaire from your trading profits. In order to help you, I want you to understand that discipline is more important than, and it comes before, strategy. It’s above tactics. Your Discipline Quotient – the level of your personal commitment to self-discipline – determines your trading profits. It is the single greatest factor in whether you become successful as a trader. I know that is a terribly presumptuous thing to say. I know you’re thinking that I must be out of my mind. I promise you that I’m:
a.Not lying to you.
b.Have nothing to gain by lying to you.
I have freely distributed thousands of copies of this chapter in several editions, hoping that as many people will read it and comment on it (you can get a free ebook version of the book at http://www.robbooker.com). If I wanted to expose myself to ridicule, I could have done it in a much easier way by dropping my pants in the supermarket. I can’t make any money from you unless you want to buy trading signals or training from me, which doesn’t cost you very much anyway. Every dime I make on any copy of this edition of this book (and I don’t make much more than a dime) is donated to charity.
My own journey to raise my Discipline Quotient is not complete. As I wrote this book, I was reminded of Robert Pirsig’s insightful comment at the introduction of his book, Zen and the Art of Motorcycle Maintenance: that the book wasn’t very accurate as far as fixing motorcycles was concerned, but the repairs to his bike were really just metaphors, anyway. I feel like I’ve written a book about discipline not because I was born with it, but rather because I’ve spent my life trying to gain more of it. Today, I trade for a living because I gained enough discipline to become successful.
Lastly, before you dive into this book, I want to encourage you to do a few things: write in the margins of this book. Take notes. Think this stuff through. Send copies to close friends and ask them to discuss it with you. I don’t care how many times you copy this book and send it to friends as long as you don’t change the writing inside of the margins or claim that you wrote it.
Email me at: [email protected]. I always answer every email that I receive. It might take me a few days, but I will respond.
Please let me know about your journey to become more disciplined.
Part 1: Discipline Is The Great Separator
Discipline is what separates human accomplishment from human failure. It is what distinguishes bad from good. It is the Grand Canyon separating good from Great. Superior performance from mediocre accomplishment. A+ from C-. 10 points up from 100 points down. Discipline breathes life into every aspect of life; the lack of discipline sucks energy from all endeavors, characteristics, qualities, attributes, projects, goals, and people. Life can be led without discipline but it cannot be led well. This isn’t something I believe because it sounds good. It’s something I believe because I’ve lived with discipline and without discipline; I’ve talked to hundreds (maybe thousands) of people who have done the same; in every case, the disciplined life was the happier life.
For a long time, I felt like a failure. I would try new trading strategies, new ways of thinking, new goals, new relationships – but I would never be satisfied. During this time of my life I wanted to improve. For every goal, I didn’t lack desire. But things seemed to stall after a while. I lost interest in the goals, the commitments, plans, or relationships. By moving to the next project, I would re-energize myself temporarily.
Repeatedly, I’d set a trading goal (sometimes the same one) and then lose steam somewhere along the way. Or I’d begin a book and then fail to complete it. Or, I’d start a relationship and blow it because I wasn’t disciplined enough to love unselfishly. Worst of all, I’d enter a trade, set my stops and limits, then completely forget about those stops and limits. I lost a lot of money that way. I was gambling with my trades, my relationships, and my life.
Inevitably, I’d start over, promise myself I wouldn’t do the same thing again….
Life became for me a series of next followed by next. Most of the time, I didn’t consciously move from one to the other; I usually skipped to the next project with the rationale that I had finally found what I was meant to do. With each next, I brought back the spark of life that I had missed. However, each next brought a smaller and less enduring amount of passion.
This process eventually became unbearable.
It became unbearable because I lacked the discipline to finish what I started.
Someone once said that the definition of insanity is doing the same thing over and over and expecting a different result. As far as I’m concerned, the person who sad that was an idiot. Once I ate 14 scoops of ice cream in one sitting, but that didn’t mean that I shouldn’t eat ice cream any longer(*). It is perfectly okay for you to set the same goal over and over, as long as it’s the right goal for you and you care deeply about succeeding. My life is proof that you can try things more than once (like relationships) and expect success every time, regardless and in spite of past failures. The problem with the search for discipline is that most of us are afraid to keep trying the same thing over and over – we quit too quickly, and therefore we proclaim ourselves sane because we accepted the apparent futility of our actions. Well, discipline is all about not giving up, and trying the same (right) thing over and over until you get it right.
I really believe that you and I cannot be exceptionally happy without discipline, in the same way that we cannot be exceptionally organized, wealthy, persuasive, or intelligent. We can be mediocre at anything without discipline (I have proven this time and time again). We can get through life just fine. We can be loved. We can enjoy our work. We can have a pleasant family life. If mid-level jobs, mid-level wealth, and mid-level happiness are acceptable to us, then acquiring discipline might not be worth the effort.
But I suspect that you’re reading this book (and I wrote it) because we’re unsatisfied with mediocrity. You’re the kind of person who feels like they want more out of life and you’re willing to improve any way possible. As far as the rest of the people out there – those who don’t care if they improve – well, they’re in good company! The nightclub of mediocrity is a great place to meet people. The majority of all humans unconsciously – or consciously – choose mediocrity. For a long time, I was a part of that mediocre majority.
Think quickly: who is the greatest person you have ever known? You can’t answer that question and tell me that the person was mediocre. I’m not saying that the person was famous, or that the person didn’t have any problems. I’m saying that you are impressed by that person because they were more than ordinary. And, more importantly, this person was extraordinary because they were – consciously or not – a disciplined person.
When I think of one of the greatest people I’ve known, I think of my aunt. She never played professional sports, ran a company, or appeared on television. She wasn’t famous or rich. She was a psychotherapist in New York City. So, if she lacked fame and fortune, what made her great?
My aunt wrote her PhD dissertation on successful techniques of providing counseling to people with full-blown AIDS. These people had years to live (at most) and months to live (at worst). She counseled with these people. She helped them work through some of life’s most painful issues: regret, sorrow, physical pain, and death. Most of her patients died before she completed her dissertation. I can’t imagine the discipline that it required for her to finish this labor of love even as her patients passed away.
Without expectation of reward, she served these people selflessly and without judging them.
Here’s an exercise for you:
Quick! Think of that great person again. A person who has influenced your life for the better. Write in the blanks below why that person affected your life. Say more about that person:
_________________________________________________________
_________________________________________________________
_________________________________________________________
Now that you’ve taken the time to think about this person’s story, ask yourself a question: How many influential people, like the one above, do you know? Probably only one or two. Or very few. When I just wrote this question, I instantly thought of my aunt again, who worked with over 200 dying people in the late 1980’s, comforting them, counseling them, without compensation. I have known very few people as unselfish as she.
She could have completed a dissertation of lesser importance. One that perhaps required fewer sorrowing experiences. But she made a choice to do something that her heart told her to do, and she disciplined herself to complete the research.
By refusing to accept the status quo, my aunt forever claimed a place in her nephew’s life, and in the lives of those she served. Likewise, if you choose to reject mediocrity and settle only for superior performance from yourself, then you are putting yourself on the fringes of society. You are willing to do what your heart tells you to do, despite obstacles, sorrow, fear, distraction – all those things that would prevent us from succeeding. In a sense, you are willing to stand alone. Near the end of her research, as my aunt cried (and typed a bit of her dissertation), and then cried some more, she felt as alone as she had ever felt … nearly every patient she had treated was dead.
To summarize, here’s the paradox: Even though discipline is the great separator – and sets us apart from those who accept mediocrity, you’ll also find that as you follow your heart with discipline, others will be attracted to you. You will influence the lives of others for good. You will be an example to those around you of the fact that all of us, no matter what, have a calling, and that you have the power to succeed.
(* This happened on the day I “graduated” from 7th grade. My friends and I walked to the ice cream parlor, where I really did eat the 14-scoop Volcano. This was a disciplined success that I still treasure to this day. It led to severe intestinal problems, but I always remind myself that every great accomplishment has its price.)
Part 2: Discipline Is The Great Leavener
My wife, a pastry chef, tells me that when she bakes bread, she adds yeast as an ingredient – so that the bread will rise. In this way, yeast is a leavener.
She tells me that when she adds the yeast to the flour mixture, that the yeast begins to feed off the natural carbohydrates (sugars) in the flour. This produces carbon dioxide and alcohol. The carbon dioxide gives the rise – it forces the gluten structure (the flour mixture) to stretch and expand. The alcohol enhances the flavor.
Similarly, discipline is the great leavener of our lives. When added to our other natural attributes and our person ingredients, we stretch and expand.
Consider that every great accomplishment by our heroes depended on some human characteristic. Mother Theresa will forever be known for an overwhelming ability to love and care for others. Charles Lindberg will be known for his trans-Atlantic flight. Albert Einstein for the Theory of Relativity. Tiger Woods for his unrivaled talent as a golfer. Shakespeare. These are all examples that we’re familiar with. None of these individuals were known, per se, for their discipline. They were known for other qualities or for their extraordinary accomplishments.
What allowed these people to expand on their natural talents and abilities to the point of becoming immortal examples of perfection in their chosen profession? What fueled the personal growth required to follow their dreams?
If we believed that these great people, including our personal heroes, were just born with the “natural” ability to succeed, we’d be missing 99% of what it took for him to do what he did.
Let’s take Leonardo da Vinci as an example. I’m not saying that God had nothing to do with his creative talents. I’m not saying that he wasn’t genetically wired for creativity, either. I’m not saying that the right side of his cerebral cortex wasn’t more fully developed than yours or mine. But what I am saying that his talents would have been completely irrelevant if he had never painted, sculpted, or written anything.
If Mother Theresa had never journeyed to distant lands to serve the poor, she would not have exemplified her natural charity for the less fortunate.
If Abraham Lincoln had never run for office (over and over) his picture wouldn’t be on the penny, the map of the U.S. might look a lot different today, and you would never had heard mention of the Gettysburg address.
1%, or maybe even less, of what these people did, had anything at all to do with natural talent. I think it would be dishonest to say that these people weren’t born with some degree of intrinsic ability. But it would also be a lie to say that you were born without any natural abilities. Whether you use and develop your abilities is the only relevant question.
Let me repeat that, because it bears repeating:
Whether we discipline ourselves to use our talents should be the focus of our energy. Not whether we were born with more of a talent than someone else, or with the talents that we really wanted, or with any noticeable talents at all.
Let’s talk about trading for a moment. It’s simply not relevant to ask whether you have any natural forex tading abilities. I can help you develop the ability to trade.
But, hey, once you throw yourself from the cliff and start trading on a live forex account, hopefully you’ve made a jump (safely) to the other side – not to the bottom. Hopefully, the strategy you took all that time to develop is going to be worth something. That’s what this book is about. I want to talk to you about how to jump safely to the other side, and to do it better than anyone else.
Discipline will expand on your trading abilities. It will stretch you.
Thomas Edison, who patented 1,093 inventions, said that “Genius is one percent inspiration and 99 percent perspiration.” He failed thousands of times before succeeding at inventing the incandescent light bulb. Discipline drove him to succeed despite initial failures. His discipline – he often worked over 20 hours per day – stretched his natural abilities. I suppose there were many inventors as inspired or intelligent as Edison. History proves that few were as disciplined.
My first important job came during college when I interviewed to become a supervisor of Italian language instruction at my university. I needed the money. I had recently become engaged to be married, and I had no idea how I could go to school and support my family unless I received an increase in pay. When the supervisor’s job opened, I knew I had to get it.
I already spoke Italian. I had been a good Italian instructor. But I didn’t have the “natural” ability to supervise. I certainly didn’t have the natural ability to interview for the supervisor’s job. So what did I do? First I made a list of everything I needed to succeed in this interview. Here’s the list I made:
Meet boss. Find out what he looks for. Practice what he looks for until it feels natural. Play the game to win.
For the week leading to the interview, I talked to every other language supervisor I could find. I talked to everyone. I talked to the individual whom I was meant to replace. Having gathered as much information as I could, I started practicing the interview. Every night, I would grab anyone I could find and I would practice the answers to my interview questions. Some of these people had no idea what I was saying in Italian. But I must have practiced at least 20 times before the day of the interview. By that time, I was ready.
I took that list and I disciplined myself to check off every entry. One night, I practiced in front of the same (poor) person at least 15 times. As I completed these tasks, I realized that my natural abilities were stretched. My comfort zone was expanding: I realized that I could interview for this job. That I did have the abilities necessary.
I aced the interview(*). I got the job and I earned enough money to help support my small family.
Now let’s talk about trading.
Before I started trading on the foreign exchange, I was in a similar predicament: the company I had founded wasn’t doing well. My job was becoming unbearable at the same time that the company was headed into its 400th crisis. I had to make a decision on where to focus my efforts – I couldn’t run the company and do something else. But I needed income, and I needed it right then.
I knew that it I focused, if I disciplined myself, I would be successful. I knew that if I spread out my efforts, I would fail.
I dropped everything and learned everything I could about the foreign exchange. Imagine stepping off into the dark, into the unexplored regions of your life, without a net. Well, that’s what I did. A lot of people I was close to thought I was crazy. I knew that if I didn’t dedicate myself completely, I wouldn’t succeed. More on this later. For now, I want you to know that the first step in discipline is the following:
A disciplined person knows he must be willing to dedicate himself 100% to the success of a chosen venture. No matter what it takes, he’s willing to endure.
Think of a time when you succeeded. Think of a time when you were able to accomplish something difficult, or important. How did you feel back then? How did you prepare for, or make it through, that moment?
Then ask yourself: What are you working on right now? Are you on the hunt for a job? A promotion? A better relationship? Whatever it is, discipline can help you expand and stretch your natural abilities. Right now, write down everything you would need to be successful at this endeavor:
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
Discipline will help you get all those things done. You might have to get up early, stay up late, or move out of your comfort zone. But as you do those things, you will realize that your talents are expanded.
If you make that list, and you dedicate yourself to doing everything it takes to accomplish your goal, your natural abilities will be stretched. And you’ll be ready for the challenge.
(* At the time, I had always been very, very nervous during interviews. But I remember than when I interviewed for this job, I was smiling the entire time. I was happy to be there interviewing, because I had prepared. I’m smiling now as I remember it, because it was one of the only times in my life that I’ve interviewed for a job and not been sweaty-palms-nervous.)
Part 3: Discipline Is A Choice
Often when I speak with people, they tell me, “Rob, I know I should be more disciplined. But just
knowing it isn’t enough. I’m just not a disciplined person.” If you have ever felt this way, then this chapter is for you.
Discipline is a choice. There is no such thing as a person born disciplined. There are just people who choose to pursue a life of discipline and those who don’t.
Daniel Goleman, in his ground-breaking book, Emotional Intelligence, which you should read, discusses the “Marshmallow Experiment.” At an early age, a set of children were told to sit at a table in a room for an hour, and were given one marshmallow. They were told that if they did not eat the marshmallow during that one hour, they would be rewarded with an entire bag of marshmallows. If they ate the single marshmallow, they wouldn’t receive any more.
It turns out that the children, who at an early age had the discipline to resist the marshmallow, were more successful later in life in terms of financial wealth, education, and satisfying relationships.
When I first read this book (during law school), I thought to myself, “Well, so much for me. I’m sure I’d eat the one marshmallow now, let alone when I was five years old.” I’ll agree that, for some of us, it’s not the most encouraging story.
But my message to you is that you feel like you can’t resist the marshmallows of life, then you’re in good company. Help is on the way. Take heart from this simple truth:
It’s never too late to learn discipline!
So, if you feel like saying, “I wasn’t born with discipline,” then I feel like saying: I wasn’t either! We weren’t born with the ability to eat without help. We didn’t leave the hospital and go buy cigars for our dad’s friends. We learned those things. Likewise, we can learn discipline. If you can read this book, you can learn discipline. In fact, the decision you made to read it in the first place is part of your decision to do anything it takes to become successful at disciplining yourself. The fact that you’ve made it this far in the book is another sign. Believe me, there are a lot of people out there who want to be successful but who aren’t willing to do whatever it takes to get what they want.
So, to summarize, you’ll find that all of us were born with the potential to discipline ourselves. I’ll also remind you that I’m not asking you to have as much discipline as a Marine drill sergeant. I’m asking you to develop as much discipline as you are able. Your greatness is achieved by increasing your discipline, not by reaching Charles Atlas’ level of discipline. This bears repeating:
It’s perfectly fine to emulate another’s discipline, or learn from it. But you are not in a race or competition to acquire more of it than anyone else. You are only in a race against yourself. If comparing yourself to other people motivates you, then by all means do it. But be warned that there will always be someone else who appears to have more discipline or less discipline than you. You will always be happier if you simply strive to improve yourself, measuring your progress against your own abilities.
When my aunt completed her 400-page dissertation, one week before defending it, she breathed a sigh of relief and shut off her computer. The next day, when she awoke, she walked to her computer and – tried to turn the computer back on so she could print the dissertation.
And the computer bombed.
She gasped. Was the entire dissertation lost? Would she have to start writing all over? First tears, then fear.
What would she do?
Right there, she determined that she would borrow a friend’s computer and start writing immediately. She faced all of those sorrows, all of those people she had treated – she faced them all over again as she started to write.
She finished on time. But she could have easily made a different choice.
My wife and I tried to have children for 6 years. Finally, one January evening, when we were just a week away from being certified to adopt by the state of West Virginia, we discovered that our greatest dream came true: she was pregnant. Two months later, the ultrasound showed that he was a boy. A month later, we decided him to name him after my father and I. We bought a crib, a stroller, clothes.
Five months later, we raced to the hospital at 1am because I couldn’t detect a heartbeat when I leaned my ear against her womb.
An hour later we started to lose hope.
An hour after that the doctor told us that there was no hope for our son.
And later that same morning, on September 23, 2003, my wife had to give birth – naturally – to our dead son. Could she have chosen to give up? Sure. Would anyone have criticized her? Absolutely not. Instead of taking on a defeated attitude, my wife bravely cried and pushed and cried and pushed. The doctor had told her that under the circumstances, her labor would last 12 to 18 hours.
It lasted 2.
It took discipline for my wife to simultaneously lose hope that her dreams would come true on that day, but still give birth. It took discipline for her to trust that another child would come and not become furious with me, or with God, or with the doctors. This doesn’t mean that she wasn’t heartbroken. What I’m saying is that she made a conscious choice to discipline herself under the most difficult of circumstances.
Choosing discipline isn’t easy. But it’s worth it.
Part 4: Discipline Is More Precious Than Gold
Discipline is a miracle more valuable than gold because it’s what gets you the gold. We’ve all heard stories about the gold miner who was just a foot or an inch away from the vein of gold before he gave up.
One of my favorite quotes comes from Harriet Beecher Stowe, the author of Uncle Tom’s Cabin. She said:
"When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then, for that is just the place and time that the tide will turn. "
In the end, I’m only writing and distributing this book so that I can help you, in some small way, to achieve what you want to achieve. If you look back on your life to the most happy moments, and wish for that feeling again – but don’t know quite how to get it – then read on. We’re going to pick up the pace on the path to discipline right now.
Part 5: The Four Enemies Of Discipline
I think I’ve started a work-out program at least every year for the past 10 years. Now, that’s not so extraordinary, is it? For sure, you know someone who has done the same. Failure at implementing an exercise regimen is commonplace. But what makes my failure in this arena so infuriating is that 12 years ago, I implemented an exercise program and lived up to it for 2 years! Somewhere along the way, I lost my discipline. I stopped working out.
One of the greatest questions in my life has been to understand not only why I never finished a project, completed a goal in the first place, but how in the world I can screw something up that I’ve already proven possible before.
Have you ever discovered a great trading strategy, implemented it successfully, and then one day just blown the whole thing to pieces by violating the strategy? I’ve done that before.
The problem lies in the lack of Discipline. And the absence of Discipline is always the result of the appearance of one of these Four Enemies.
Enemy One: Fear. We fear the ability to achieve what we set out to do, so we never try in the first place (failure from the start) or we simply give up along the way (failure mid-stream). Much has been made of the theoretical “fear of success” vs. the “fear of failure,” and frankly, I’ve experienced both kinds, plus some others for good measure. Understanding the different kinds of fear is an excellent way to identify which you struggle with the most.
Fear of Failure. This is probably the most common. This is the reason that salespeople fail to make their cold calls, and it’s why shy people end up really lonely. If you struggle with a fear of failure, you’re in good company. Fear of failure also includes instances when we just stop trading because we’re afraid we’ve lost so much of our account value that the only way to stop losing is to not trade at all.
Fear of Success. This sounds a bit silly at first, but many of us live with a fear of what will happen if we succeed. One of the saddest moments in my life was when I realized that a person I love dearly was so afraid of having to accept success that she decided to sabotage her own victories. People who fight this fear often are worried that if they are successful, the world will expect more of them than they are able to provide.
Fear of the Unknown. Most of us have felt this when we get lost while driving. Once in high school, I summoned the courage to beat back fear of failure: I asked a beautiful, smart girl on a date. She accepted. On the night of the date, I was so afraid of what to do on a date that I never even picked her up. When I saw her at school, I avoided her. I never spoke another word to her. Enough said about that experience.
When you’re afraid of what you don’t know, you’re more inclined to almost implement a new trading strategy. For instance, you’ll open a live account and then not quite follow through on everything you learned from the demo account experience. You’re afraid of what will happen if you just let the strategy fly with real money. That’s a good way to lose your live account.
There are many other examples of types of fears that we encounter. Succumbing to these fears gives one a sense of comfort. A salesperson, when he decides to not make a difficult cold call, feels more comfortable. Of course, he has succumbed to an enemy of discipline. In this way, each of us trades the chance for success each time we succumb to these fears.
Giving into these fears doesn’t make you more comfortable in the long term, however. My first job after law school was my big introduction to the world of finance, as I worked as a headhunter for top-level financial professionals. I did very well at that job because every morning when I walked in the door to work, I picked up the phone immediately and started making as many cold calls as I could. Every evening I made a list of cold calls to make the next day. I was uncomfortable when I made the calls. I felt very comfortable, however, when I closed deals because I had been willing to make those calls. On the other hand, in 9 months of work I watched the four people that sat around me fail miserably – they didn’t make as many calls, and they eventually felt far less comfortable.
Enemy 2: Distraction. Distraction is the experience of trading what you should be thinking about for what is more convenient or urgent. It’s when you daydream when you ought to be driving (this is bad); it’s not when you daydream while you’re taking a Geometry test (this is completely natural and harmless).
Distraction is not bad all the time. I think allowing ourselves to become distracted on a regular basis has some merit; in fact, I find a lot of comfort in allowing myself to play a couple of rounds of a video game in the middle of the workday. Letting yourself go for a while can be healthy.
But it can also be destructive.
After the fifth grade – and the year that I had decided, once and for all (at age 10) that I was going to be a writer – I promptly forgot everything that I had decided. I entered the sixth grade, I started having to switch classes. I discovered that girls existed (although they did a fine job of ignoring my existence for the next, well, forever). Instead of writing, which I still loved, I let the talent slip. For at least two more years I didn’t pick up a pen and paper.
I lost critical time when I did that. When I became distracted and allowed myself to pursue other activities, instead of just writing for a few minutes a day, I established a precedent. During that time, I did think of writing. But I started to become used to other things. Over time, those other things commanded my attention. Writing was all but forgotten.
Distraction is especially bad for you if you succumb to it immediately after making an important decision. Sadly, we’re all quite good at this. There are so many shows, people, projects, and goals that are competing for our attention. We don’t always succeed in keeping our eye on the ball.
I have trained hundreds of forex traders across the globe, and not a few of them have bragged to me about what kinds of things they can do while trading – they play with the kids, balance the checkbook, work at a day job, or some other activity. In every case I have advised the trader to stop trying to do two things at once. For a while, putting one foot in the world of trading and the other someplace else won’t be a big deal. But when the stakes get higher, you need to be focused.
Because trading is Web-based, many traders succumb to online pornography while trading. This practice is not only repugnant, but it’s destructive to your trading profits.
The exercises in this book will help you stay focused on what’s important. And they won’t interfere with your natural right to completely disregard responsibilities every once in a while.
Enemy 3: Delay. They say that necessity is the mother of invention – that when we’re under pressure to produce, we become more innovative. I propose that procrastination is the mother of regression.
As I’ve toured the country and spoken to traders, I’ve been told that procrastination is just a system that works well for some people. I’ve been told that sometimes, you just can’t think clearly about a project until the very last minute. I accept that as valid. It’s happened to me many times. At the last minute I seem to have the mental resources to complete a project.
If that’s a valid point, then why would delay be an enemy of discipline?
Procrastination, or delay, is the act of avoiding what you know you must do. It doesn’t build character. It saps you of character. It might bring out a lot of creativity, but it robs you of precious time, and you subject yourself to unnecessary pressure.
I’ll put it as simply as possible: when you procrastinate, you might find a huge resource of energy to complete a project – but you don’t have any time to review what you’ve done. I think you and I are prone to do some of our best work under pressure. I also think that we’re sometimes prone to do some of our worst work under pressure.
Now, if you’re absolutely, positively, motivated to do your very best work at the last minute, then I suggest that you follow the advice of Jerry Hirschberg, the designer responsible for many of Nissan’s most innovative vehicles. He says that if you’re motivated and inspired by tight deadlines, then you should set preliminary deadlines. I think it’s a fantastic exercise, and we’ll talk more about it later.
This applies to trading, too. There is a pervasive belief amongst traders (both equity and forex traders) that time of day matters little when trading – that you can make profits any time of the day. So, for U.S.-based traders, they decide that they don’t have to get up in the middle of the night to catch the European and Asian markets. Well, this is a form of procrastination: trading sleep for profits. If you want to be successful at trading on the foreign exchange, you have to be willing to consistently get up and get going at the same time every day.
Worse yet, many traders I meet with have lost substantial amounts of money by staying in a losing trade for too long – procrastinating the exit. This can drain your account faster than anything. It can tear you to pieces, too. If you have this problem, or the opposite (exiting too quickly), increased discipline will give you everything you need in order to make better, more profitable trading decisions.
Enemy 4: Despair. There simply doesn’t exist a more pernicious enemy to discipline. We are all susceptible to some form of despair, and we’ve all battled it. Some of us have been more successful than others. But when it gets hold of us, it saps of us of our discipline faster than anything else.
Here’s a letter I received that makes the point better than I ever could:
I always dreaded coming home, but on the day that I received my 12th grade report card I was more fearful than ever. My dad expected the very best in me – this was the same man who resolved his problems with my mother by yelling, by breaking furniture, and by threatening to do things much worse.
I carried in my hand three Cs and two As. I knew that if I revealed the report card to my father, that anything was bound to happen. But I also knew that if I didn’t show it to him, he was going to find out about it anyway.
I thought about running away from home that day.
Instead, I showed him the report card.
And he beat me. I let him hit me. He chased me down the steps of our house (no one else was home) and he told me that I was stupid. He said a lot of other things, but when he told me I was stupid, well, that hurt more than anything else. He chased me down the stairs and beat me with his boot.
I’ll pause here and ask you: what would your reaction be?
When he was finished, he trailed off into the master bedroom and left me in the hall. He was still yelling at me from his room. I didn’t know what to do. I didn’t know if I should throw myself from my bedroom window, run to my friend’s house, or call the police.
Instead of doing any of those things, I simply returned to my bedroom and studied. No one was going to call me stupid.
I have since graduated from medical school. My dad remained violent. He eventually lost custody of my brothers and sisters. But I seriously look back on the day I brought that report card home, and I realize that he’s the one that failed. It turns out I wasn’t stupid.
Our reactions to the bad things that happen to us are completely within our control. The things that happen to us – well, that’s an entirely different story: sometimes we control our circumstances and sometimes, as in the letter above, we don’t. Choosing to lose hope would have left the letter-writer with hardly the will to live. Now she’s living a life of care – tending to the needs of the sick. We are all better off that she decided to reject the enemy of depression.
When you trade currency online for a living, you’re going to get burned eventually. At times like that, it’s easy to lose hope. When you lose hope, you lose everything. You’ve beaten yourself. The best solution to this is to get the help you need to improve your discipline and your trading abilities.
It’s not enough to just have a positive attitude, and falsely believe that everything will turn out okay. You have to get up and do something.
About Rob
Rob Booker trades profitably for his own account and manages money for others. Rob has trained hundreds of fx traders around the world. He has helped them develop their own trading systems, but more importantly, Rob focuses on helping traders deal with the mental, psychological, and discipline issues related to training. For Rob, successful trading is more mental than anything else.
Read Rob's blog at: http://www.piptopia.com
Book Synopsis
"The Currency Trader's Handbook" is the first published form of Rob Booker's ebooks on currency trading. Included are money management strategies, trading systems, and a focus on how to develop the mental toughness to profit in the world's most volatile trading environment.
The book can be purchased from here.
Have you ever exited a trade at a loss, only to find that the trade would have been profitable only a little while later?
Have you ever exited a losing trade, opened one in the opposite direction, and then lost twice?
I have. I used to make those mistakes and many others.
Have you ever not stayed in a trade long enough to get the full amount of profit from it?
Discipline is the answer. Disciplined traders succeed and undisciplined traders fail. It’s really that easy.
This isn’t a chapter about currency trading, though – at least not directly. It’s really about how you can learn to acquire greater discipline in your life, which will make you a better trader (much better). In fact, I promise that this book will make you a better trader, as long as you’re willing to give some of my advice a try. Once you’ve acquired greater discipline in your life, I’ve got a bunch of forex trading strategies that you can use (or you can find many, many others elsewhere). But none of those strategies are worth anything without discipline, because…
(There is a longer version of this chapter available at the following internet address: http://www.robbooker.com/Miracle_of_Discipline.pdf )
The problem with most trading
systems is that they assume
you already possess the
discipline to implement them.
I have read just about every trading strategy book out there – and hundreds of self-help books -- and all of them have impacted my life positively. I’m a better trader for having read them. However, for much of my life I struggled with a lack of discipline, and as long as I struggled with discipline, I was always almost successful at whatever I tried. In the end, I was left with mountains of good advice and without the discipline to implement all of it consistently. After hundreds and hundreds of conversations with traders and successful people across the world, I realized that I wasn’t alone, and for many people, the only obstacle blocking the path to trading profits (and other important accomplishments) is a lack of discipline.
My successes and my failures can be traced to the presence – or absence – of one human quality: discipline.
Having perfect discipline – not perfect strategy – is the key.
This book is about how to become a renown trader. Not just a good trader. But one of the very best. Not just a few thousand dollars per month. I want you to be a millionaire from your trading profits. In order to help you, I want you to understand that discipline is more important than, and it comes before, strategy. It’s above tactics. Your Discipline Quotient – the level of your personal commitment to self-discipline – determines your trading profits. It is the single greatest factor in whether you become successful as a trader. I know that is a terribly presumptuous thing to say. I know you’re thinking that I must be out of my mind. I promise you that I’m:
a.Not lying to you.
b.Have nothing to gain by lying to you.
I have freely distributed thousands of copies of this chapter in several editions, hoping that as many people will read it and comment on it (you can get a free ebook version of the book at http://www.robbooker.com). If I wanted to expose myself to ridicule, I could have done it in a much easier way by dropping my pants in the supermarket. I can’t make any money from you unless you want to buy trading signals or training from me, which doesn’t cost you very much anyway. Every dime I make on any copy of this edition of this book (and I don’t make much more than a dime) is donated to charity.
My own journey to raise my Discipline Quotient is not complete. As I wrote this book, I was reminded of Robert Pirsig’s insightful comment at the introduction of his book, Zen and the Art of Motorcycle Maintenance: that the book wasn’t very accurate as far as fixing motorcycles was concerned, but the repairs to his bike were really just metaphors, anyway. I feel like I’ve written a book about discipline not because I was born with it, but rather because I’ve spent my life trying to gain more of it. Today, I trade for a living because I gained enough discipline to become successful.
Lastly, before you dive into this book, I want to encourage you to do a few things: write in the margins of this book. Take notes. Think this stuff through. Send copies to close friends and ask them to discuss it with you. I don’t care how many times you copy this book and send it to friends as long as you don’t change the writing inside of the margins or claim that you wrote it.
Email me at: [email protected]. I always answer every email that I receive. It might take me a few days, but I will respond.
Please let me know about your journey to become more disciplined.
Part 1: Discipline Is The Great Separator
Discipline is what separates human accomplishment from human failure. It is what distinguishes bad from good. It is the Grand Canyon separating good from Great. Superior performance from mediocre accomplishment. A+ from C-. 10 points up from 100 points down. Discipline breathes life into every aspect of life; the lack of discipline sucks energy from all endeavors, characteristics, qualities, attributes, projects, goals, and people. Life can be led without discipline but it cannot be led well. This isn’t something I believe because it sounds good. It’s something I believe because I’ve lived with discipline and without discipline; I’ve talked to hundreds (maybe thousands) of people who have done the same; in every case, the disciplined life was the happier life.
For a long time, I felt like a failure. I would try new trading strategies, new ways of thinking, new goals, new relationships – but I would never be satisfied. During this time of my life I wanted to improve. For every goal, I didn’t lack desire. But things seemed to stall after a while. I lost interest in the goals, the commitments, plans, or relationships. By moving to the next project, I would re-energize myself temporarily.
Repeatedly, I’d set a trading goal (sometimes the same one) and then lose steam somewhere along the way. Or I’d begin a book and then fail to complete it. Or, I’d start a relationship and blow it because I wasn’t disciplined enough to love unselfishly. Worst of all, I’d enter a trade, set my stops and limits, then completely forget about those stops and limits. I lost a lot of money that way. I was gambling with my trades, my relationships, and my life.
Inevitably, I’d start over, promise myself I wouldn’t do the same thing again….
Life became for me a series of next followed by next. Most of the time, I didn’t consciously move from one to the other; I usually skipped to the next project with the rationale that I had finally found what I was meant to do. With each next, I brought back the spark of life that I had missed. However, each next brought a smaller and less enduring amount of passion.
This process eventually became unbearable.
It became unbearable because I lacked the discipline to finish what I started.
Someone once said that the definition of insanity is doing the same thing over and over and expecting a different result. As far as I’m concerned, the person who sad that was an idiot. Once I ate 14 scoops of ice cream in one sitting, but that didn’t mean that I shouldn’t eat ice cream any longer(*). It is perfectly okay for you to set the same goal over and over, as long as it’s the right goal for you and you care deeply about succeeding. My life is proof that you can try things more than once (like relationships) and expect success every time, regardless and in spite of past failures. The problem with the search for discipline is that most of us are afraid to keep trying the same thing over and over – we quit too quickly, and therefore we proclaim ourselves sane because we accepted the apparent futility of our actions. Well, discipline is all about not giving up, and trying the same (right) thing over and over until you get it right.
I really believe that you and I cannot be exceptionally happy without discipline, in the same way that we cannot be exceptionally organized, wealthy, persuasive, or intelligent. We can be mediocre at anything without discipline (I have proven this time and time again). We can get through life just fine. We can be loved. We can enjoy our work. We can have a pleasant family life. If mid-level jobs, mid-level wealth, and mid-level happiness are acceptable to us, then acquiring discipline might not be worth the effort.
But I suspect that you’re reading this book (and I wrote it) because we’re unsatisfied with mediocrity. You’re the kind of person who feels like they want more out of life and you’re willing to improve any way possible. As far as the rest of the people out there – those who don’t care if they improve – well, they’re in good company! The nightclub of mediocrity is a great place to meet people. The majority of all humans unconsciously – or consciously – choose mediocrity. For a long time, I was a part of that mediocre majority.
Think quickly: who is the greatest person you have ever known? You can’t answer that question and tell me that the person was mediocre. I’m not saying that the person was famous, or that the person didn’t have any problems. I’m saying that you are impressed by that person because they were more than ordinary. And, more importantly, this person was extraordinary because they were – consciously or not – a disciplined person.
When I think of one of the greatest people I’ve known, I think of my aunt. She never played professional sports, ran a company, or appeared on television. She wasn’t famous or rich. She was a psychotherapist in New York City. So, if she lacked fame and fortune, what made her great?
My aunt wrote her PhD dissertation on successful techniques of providing counseling to people with full-blown AIDS. These people had years to live (at most) and months to live (at worst). She counseled with these people. She helped them work through some of life’s most painful issues: regret, sorrow, physical pain, and death. Most of her patients died before she completed her dissertation. I can’t imagine the discipline that it required for her to finish this labor of love even as her patients passed away.
Without expectation of reward, she served these people selflessly and without judging them.
Here’s an exercise for you:
Quick! Think of that great person again. A person who has influenced your life for the better. Write in the blanks below why that person affected your life. Say more about that person:
_________________________________________________________
_________________________________________________________
_________________________________________________________
Now that you’ve taken the time to think about this person’s story, ask yourself a question: How many influential people, like the one above, do you know? Probably only one or two. Or very few. When I just wrote this question, I instantly thought of my aunt again, who worked with over 200 dying people in the late 1980’s, comforting them, counseling them, without compensation. I have known very few people as unselfish as she.
She could have completed a dissertation of lesser importance. One that perhaps required fewer sorrowing experiences. But she made a choice to do something that her heart told her to do, and she disciplined herself to complete the research.
By refusing to accept the status quo, my aunt forever claimed a place in her nephew’s life, and in the lives of those she served. Likewise, if you choose to reject mediocrity and settle only for superior performance from yourself, then you are putting yourself on the fringes of society. You are willing to do what your heart tells you to do, despite obstacles, sorrow, fear, distraction – all those things that would prevent us from succeeding. In a sense, you are willing to stand alone. Near the end of her research, as my aunt cried (and typed a bit of her dissertation), and then cried some more, she felt as alone as she had ever felt … nearly every patient she had treated was dead.
To summarize, here’s the paradox: Even though discipline is the great separator – and sets us apart from those who accept mediocrity, you’ll also find that as you follow your heart with discipline, others will be attracted to you. You will influence the lives of others for good. You will be an example to those around you of the fact that all of us, no matter what, have a calling, and that you have the power to succeed.
(* This happened on the day I “graduated” from 7th grade. My friends and I walked to the ice cream parlor, where I really did eat the 14-scoop Volcano. This was a disciplined success that I still treasure to this day. It led to severe intestinal problems, but I always remind myself that every great accomplishment has its price.)
Part 2: Discipline Is The Great Leavener
My wife, a pastry chef, tells me that when she bakes bread, she adds yeast as an ingredient – so that the bread will rise. In this way, yeast is a leavener.
She tells me that when she adds the yeast to the flour mixture, that the yeast begins to feed off the natural carbohydrates (sugars) in the flour. This produces carbon dioxide and alcohol. The carbon dioxide gives the rise – it forces the gluten structure (the flour mixture) to stretch and expand. The alcohol enhances the flavor.
Similarly, discipline is the great leavener of our lives. When added to our other natural attributes and our person ingredients, we stretch and expand.
Consider that every great accomplishment by our heroes depended on some human characteristic. Mother Theresa will forever be known for an overwhelming ability to love and care for others. Charles Lindberg will be known for his trans-Atlantic flight. Albert Einstein for the Theory of Relativity. Tiger Woods for his unrivaled talent as a golfer. Shakespeare. These are all examples that we’re familiar with. None of these individuals were known, per se, for their discipline. They were known for other qualities or for their extraordinary accomplishments.
What allowed these people to expand on their natural talents and abilities to the point of becoming immortal examples of perfection in their chosen profession? What fueled the personal growth required to follow their dreams?
If we believed that these great people, including our personal heroes, were just born with the “natural” ability to succeed, we’d be missing 99% of what it took for him to do what he did.
Let’s take Leonardo da Vinci as an example. I’m not saying that God had nothing to do with his creative talents. I’m not saying that he wasn’t genetically wired for creativity, either. I’m not saying that the right side of his cerebral cortex wasn’t more fully developed than yours or mine. But what I am saying that his talents would have been completely irrelevant if he had never painted, sculpted, or written anything.
If Mother Theresa had never journeyed to distant lands to serve the poor, she would not have exemplified her natural charity for the less fortunate.
If Abraham Lincoln had never run for office (over and over) his picture wouldn’t be on the penny, the map of the U.S. might look a lot different today, and you would never had heard mention of the Gettysburg address.
1%, or maybe even less, of what these people did, had anything at all to do with natural talent. I think it would be dishonest to say that these people weren’t born with some degree of intrinsic ability. But it would also be a lie to say that you were born without any natural abilities. Whether you use and develop your abilities is the only relevant question.
Let me repeat that, because it bears repeating:
Whether we discipline ourselves to use our talents should be the focus of our energy. Not whether we were born with more of a talent than someone else, or with the talents that we really wanted, or with any noticeable talents at all.
Let’s talk about trading for a moment. It’s simply not relevant to ask whether you have any natural forex tading abilities. I can help you develop the ability to trade.
But, hey, once you throw yourself from the cliff and start trading on a live forex account, hopefully you’ve made a jump (safely) to the other side – not to the bottom. Hopefully, the strategy you took all that time to develop is going to be worth something. That’s what this book is about. I want to talk to you about how to jump safely to the other side, and to do it better than anyone else.
Discipline will expand on your trading abilities. It will stretch you.
Thomas Edison, who patented 1,093 inventions, said that “Genius is one percent inspiration and 99 percent perspiration.” He failed thousands of times before succeeding at inventing the incandescent light bulb. Discipline drove him to succeed despite initial failures. His discipline – he often worked over 20 hours per day – stretched his natural abilities. I suppose there were many inventors as inspired or intelligent as Edison. History proves that few were as disciplined.
My first important job came during college when I interviewed to become a supervisor of Italian language instruction at my university. I needed the money. I had recently become engaged to be married, and I had no idea how I could go to school and support my family unless I received an increase in pay. When the supervisor’s job opened, I knew I had to get it.
I already spoke Italian. I had been a good Italian instructor. But I didn’t have the “natural” ability to supervise. I certainly didn’t have the natural ability to interview for the supervisor’s job. So what did I do? First I made a list of everything I needed to succeed in this interview. Here’s the list I made:
Meet boss. Find out what he looks for. Practice what he looks for until it feels natural. Play the game to win.
For the week leading to the interview, I talked to every other language supervisor I could find. I talked to everyone. I talked to the individual whom I was meant to replace. Having gathered as much information as I could, I started practicing the interview. Every night, I would grab anyone I could find and I would practice the answers to my interview questions. Some of these people had no idea what I was saying in Italian. But I must have practiced at least 20 times before the day of the interview. By that time, I was ready.
I took that list and I disciplined myself to check off every entry. One night, I practiced in front of the same (poor) person at least 15 times. As I completed these tasks, I realized that my natural abilities were stretched. My comfort zone was expanding: I realized that I could interview for this job. That I did have the abilities necessary.
I aced the interview(*). I got the job and I earned enough money to help support my small family.
Now let’s talk about trading.
Before I started trading on the foreign exchange, I was in a similar predicament: the company I had founded wasn’t doing well. My job was becoming unbearable at the same time that the company was headed into its 400th crisis. I had to make a decision on where to focus my efforts – I couldn’t run the company and do something else. But I needed income, and I needed it right then.
I knew that it I focused, if I disciplined myself, I would be successful. I knew that if I spread out my efforts, I would fail.
I dropped everything and learned everything I could about the foreign exchange. Imagine stepping off into the dark, into the unexplored regions of your life, without a net. Well, that’s what I did. A lot of people I was close to thought I was crazy. I knew that if I didn’t dedicate myself completely, I wouldn’t succeed. More on this later. For now, I want you to know that the first step in discipline is the following:
A disciplined person knows he must be willing to dedicate himself 100% to the success of a chosen venture. No matter what it takes, he’s willing to endure.
Think of a time when you succeeded. Think of a time when you were able to accomplish something difficult, or important. How did you feel back then? How did you prepare for, or make it through, that moment?
Then ask yourself: What are you working on right now? Are you on the hunt for a job? A promotion? A better relationship? Whatever it is, discipline can help you expand and stretch your natural abilities. Right now, write down everything you would need to be successful at this endeavor:
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
________________________________________________
Discipline will help you get all those things done. You might have to get up early, stay up late, or move out of your comfort zone. But as you do those things, you will realize that your talents are expanded.
If you make that list, and you dedicate yourself to doing everything it takes to accomplish your goal, your natural abilities will be stretched. And you’ll be ready for the challenge.
(* At the time, I had always been very, very nervous during interviews. But I remember than when I interviewed for this job, I was smiling the entire time. I was happy to be there interviewing, because I had prepared. I’m smiling now as I remember it, because it was one of the only times in my life that I’ve interviewed for a job and not been sweaty-palms-nervous.)
Part 3: Discipline Is A Choice
Often when I speak with people, they tell me, “Rob, I know I should be more disciplined. But just
knowing it isn’t enough. I’m just not a disciplined person.” If you have ever felt this way, then this chapter is for you.
Discipline is a choice. There is no such thing as a person born disciplined. There are just people who choose to pursue a life of discipline and those who don’t.
Daniel Goleman, in his ground-breaking book, Emotional Intelligence, which you should read, discusses the “Marshmallow Experiment.” At an early age, a set of children were told to sit at a table in a room for an hour, and were given one marshmallow. They were told that if they did not eat the marshmallow during that one hour, they would be rewarded with an entire bag of marshmallows. If they ate the single marshmallow, they wouldn’t receive any more.
It turns out that the children, who at an early age had the discipline to resist the marshmallow, were more successful later in life in terms of financial wealth, education, and satisfying relationships.
When I first read this book (during law school), I thought to myself, “Well, so much for me. I’m sure I’d eat the one marshmallow now, let alone when I was five years old.” I’ll agree that, for some of us, it’s not the most encouraging story.
But my message to you is that you feel like you can’t resist the marshmallows of life, then you’re in good company. Help is on the way. Take heart from this simple truth:
It’s never too late to learn discipline!
So, if you feel like saying, “I wasn’t born with discipline,” then I feel like saying: I wasn’t either! We weren’t born with the ability to eat without help. We didn’t leave the hospital and go buy cigars for our dad’s friends. We learned those things. Likewise, we can learn discipline. If you can read this book, you can learn discipline. In fact, the decision you made to read it in the first place is part of your decision to do anything it takes to become successful at disciplining yourself. The fact that you’ve made it this far in the book is another sign. Believe me, there are a lot of people out there who want to be successful but who aren’t willing to do whatever it takes to get what they want.
So, to summarize, you’ll find that all of us were born with the potential to discipline ourselves. I’ll also remind you that I’m not asking you to have as much discipline as a Marine drill sergeant. I’m asking you to develop as much discipline as you are able. Your greatness is achieved by increasing your discipline, not by reaching Charles Atlas’ level of discipline. This bears repeating:
It’s perfectly fine to emulate another’s discipline, or learn from it. But you are not in a race or competition to acquire more of it than anyone else. You are only in a race against yourself. If comparing yourself to other people motivates you, then by all means do it. But be warned that there will always be someone else who appears to have more discipline or less discipline than you. You will always be happier if you simply strive to improve yourself, measuring your progress against your own abilities.
When my aunt completed her 400-page dissertation, one week before defending it, she breathed a sigh of relief and shut off her computer. The next day, when she awoke, she walked to her computer and – tried to turn the computer back on so she could print the dissertation.
And the computer bombed.
She gasped. Was the entire dissertation lost? Would she have to start writing all over? First tears, then fear.
What would she do?
Right there, she determined that she would borrow a friend’s computer and start writing immediately. She faced all of those sorrows, all of those people she had treated – she faced them all over again as she started to write.
She finished on time. But she could have easily made a different choice.
My wife and I tried to have children for 6 years. Finally, one January evening, when we were just a week away from being certified to adopt by the state of West Virginia, we discovered that our greatest dream came true: she was pregnant. Two months later, the ultrasound showed that he was a boy. A month later, we decided him to name him after my father and I. We bought a crib, a stroller, clothes.
Five months later, we raced to the hospital at 1am because I couldn’t detect a heartbeat when I leaned my ear against her womb.
An hour later we started to lose hope.
An hour after that the doctor told us that there was no hope for our son.
And later that same morning, on September 23, 2003, my wife had to give birth – naturally – to our dead son. Could she have chosen to give up? Sure. Would anyone have criticized her? Absolutely not. Instead of taking on a defeated attitude, my wife bravely cried and pushed and cried and pushed. The doctor had told her that under the circumstances, her labor would last 12 to 18 hours.
It lasted 2.
It took discipline for my wife to simultaneously lose hope that her dreams would come true on that day, but still give birth. It took discipline for her to trust that another child would come and not become furious with me, or with God, or with the doctors. This doesn’t mean that she wasn’t heartbroken. What I’m saying is that she made a conscious choice to discipline herself under the most difficult of circumstances.
Choosing discipline isn’t easy. But it’s worth it.
Part 4: Discipline Is More Precious Than Gold
Discipline is a miracle more valuable than gold because it’s what gets you the gold. We’ve all heard stories about the gold miner who was just a foot or an inch away from the vein of gold before he gave up.
One of my favorite quotes comes from Harriet Beecher Stowe, the author of Uncle Tom’s Cabin. She said:
"When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then, for that is just the place and time that the tide will turn. "
In the end, I’m only writing and distributing this book so that I can help you, in some small way, to achieve what you want to achieve. If you look back on your life to the most happy moments, and wish for that feeling again – but don’t know quite how to get it – then read on. We’re going to pick up the pace on the path to discipline right now.
Part 5: The Four Enemies Of Discipline
I think I’ve started a work-out program at least every year for the past 10 years. Now, that’s not so extraordinary, is it? For sure, you know someone who has done the same. Failure at implementing an exercise regimen is commonplace. But what makes my failure in this arena so infuriating is that 12 years ago, I implemented an exercise program and lived up to it for 2 years! Somewhere along the way, I lost my discipline. I stopped working out.
One of the greatest questions in my life has been to understand not only why I never finished a project, completed a goal in the first place, but how in the world I can screw something up that I’ve already proven possible before.
Have you ever discovered a great trading strategy, implemented it successfully, and then one day just blown the whole thing to pieces by violating the strategy? I’ve done that before.
The problem lies in the lack of Discipline. And the absence of Discipline is always the result of the appearance of one of these Four Enemies.
Enemy One: Fear. We fear the ability to achieve what we set out to do, so we never try in the first place (failure from the start) or we simply give up along the way (failure mid-stream). Much has been made of the theoretical “fear of success” vs. the “fear of failure,” and frankly, I’ve experienced both kinds, plus some others for good measure. Understanding the different kinds of fear is an excellent way to identify which you struggle with the most.
Fear of Failure. This is probably the most common. This is the reason that salespeople fail to make their cold calls, and it’s why shy people end up really lonely. If you struggle with a fear of failure, you’re in good company. Fear of failure also includes instances when we just stop trading because we’re afraid we’ve lost so much of our account value that the only way to stop losing is to not trade at all.
Fear of Success. This sounds a bit silly at first, but many of us live with a fear of what will happen if we succeed. One of the saddest moments in my life was when I realized that a person I love dearly was so afraid of having to accept success that she decided to sabotage her own victories. People who fight this fear often are worried that if they are successful, the world will expect more of them than they are able to provide.
Fear of the Unknown. Most of us have felt this when we get lost while driving. Once in high school, I summoned the courage to beat back fear of failure: I asked a beautiful, smart girl on a date. She accepted. On the night of the date, I was so afraid of what to do on a date that I never even picked her up. When I saw her at school, I avoided her. I never spoke another word to her. Enough said about that experience.
When you’re afraid of what you don’t know, you’re more inclined to almost implement a new trading strategy. For instance, you’ll open a live account and then not quite follow through on everything you learned from the demo account experience. You’re afraid of what will happen if you just let the strategy fly with real money. That’s a good way to lose your live account.
There are many other examples of types of fears that we encounter. Succumbing to these fears gives one a sense of comfort. A salesperson, when he decides to not make a difficult cold call, feels more comfortable. Of course, he has succumbed to an enemy of discipline. In this way, each of us trades the chance for success each time we succumb to these fears.
Giving into these fears doesn’t make you more comfortable in the long term, however. My first job after law school was my big introduction to the world of finance, as I worked as a headhunter for top-level financial professionals. I did very well at that job because every morning when I walked in the door to work, I picked up the phone immediately and started making as many cold calls as I could. Every evening I made a list of cold calls to make the next day. I was uncomfortable when I made the calls. I felt very comfortable, however, when I closed deals because I had been willing to make those calls. On the other hand, in 9 months of work I watched the four people that sat around me fail miserably – they didn’t make as many calls, and they eventually felt far less comfortable.
Enemy 2: Distraction. Distraction is the experience of trading what you should be thinking about for what is more convenient or urgent. It’s when you daydream when you ought to be driving (this is bad); it’s not when you daydream while you’re taking a Geometry test (this is completely natural and harmless).
Distraction is not bad all the time. I think allowing ourselves to become distracted on a regular basis has some merit; in fact, I find a lot of comfort in allowing myself to play a couple of rounds of a video game in the middle of the workday. Letting yourself go for a while can be healthy.
But it can also be destructive.
After the fifth grade – and the year that I had decided, once and for all (at age 10) that I was going to be a writer – I promptly forgot everything that I had decided. I entered the sixth grade, I started having to switch classes. I discovered that girls existed (although they did a fine job of ignoring my existence for the next, well, forever). Instead of writing, which I still loved, I let the talent slip. For at least two more years I didn’t pick up a pen and paper.
I lost critical time when I did that. When I became distracted and allowed myself to pursue other activities, instead of just writing for a few minutes a day, I established a precedent. During that time, I did think of writing. But I started to become used to other things. Over time, those other things commanded my attention. Writing was all but forgotten.
Distraction is especially bad for you if you succumb to it immediately after making an important decision. Sadly, we’re all quite good at this. There are so many shows, people, projects, and goals that are competing for our attention. We don’t always succeed in keeping our eye on the ball.
I have trained hundreds of forex traders across the globe, and not a few of them have bragged to me about what kinds of things they can do while trading – they play with the kids, balance the checkbook, work at a day job, or some other activity. In every case I have advised the trader to stop trying to do two things at once. For a while, putting one foot in the world of trading and the other someplace else won’t be a big deal. But when the stakes get higher, you need to be focused.
Because trading is Web-based, many traders succumb to online pornography while trading. This practice is not only repugnant, but it’s destructive to your trading profits.
The exercises in this book will help you stay focused on what’s important. And they won’t interfere with your natural right to completely disregard responsibilities every once in a while.
Enemy 3: Delay. They say that necessity is the mother of invention – that when we’re under pressure to produce, we become more innovative. I propose that procrastination is the mother of regression.
As I’ve toured the country and spoken to traders, I’ve been told that procrastination is just a system that works well for some people. I’ve been told that sometimes, you just can’t think clearly about a project until the very last minute. I accept that as valid. It’s happened to me many times. At the last minute I seem to have the mental resources to complete a project.
If that’s a valid point, then why would delay be an enemy of discipline?
Procrastination, or delay, is the act of avoiding what you know you must do. It doesn’t build character. It saps you of character. It might bring out a lot of creativity, but it robs you of precious time, and you subject yourself to unnecessary pressure.
I’ll put it as simply as possible: when you procrastinate, you might find a huge resource of energy to complete a project – but you don’t have any time to review what you’ve done. I think you and I are prone to do some of our best work under pressure. I also think that we’re sometimes prone to do some of our worst work under pressure.
Now, if you’re absolutely, positively, motivated to do your very best work at the last minute, then I suggest that you follow the advice of Jerry Hirschberg, the designer responsible for many of Nissan’s most innovative vehicles. He says that if you’re motivated and inspired by tight deadlines, then you should set preliminary deadlines. I think it’s a fantastic exercise, and we’ll talk more about it later.
This applies to trading, too. There is a pervasive belief amongst traders (both equity and forex traders) that time of day matters little when trading – that you can make profits any time of the day. So, for U.S.-based traders, they decide that they don’t have to get up in the middle of the night to catch the European and Asian markets. Well, this is a form of procrastination: trading sleep for profits. If you want to be successful at trading on the foreign exchange, you have to be willing to consistently get up and get going at the same time every day.
Worse yet, many traders I meet with have lost substantial amounts of money by staying in a losing trade for too long – procrastinating the exit. This can drain your account faster than anything. It can tear you to pieces, too. If you have this problem, or the opposite (exiting too quickly), increased discipline will give you everything you need in order to make better, more profitable trading decisions.
Enemy 4: Despair. There simply doesn’t exist a more pernicious enemy to discipline. We are all susceptible to some form of despair, and we’ve all battled it. Some of us have been more successful than others. But when it gets hold of us, it saps of us of our discipline faster than anything else.
Here’s a letter I received that makes the point better than I ever could:
I always dreaded coming home, but on the day that I received my 12th grade report card I was more fearful than ever. My dad expected the very best in me – this was the same man who resolved his problems with my mother by yelling, by breaking furniture, and by threatening to do things much worse.
I carried in my hand three Cs and two As. I knew that if I revealed the report card to my father, that anything was bound to happen. But I also knew that if I didn’t show it to him, he was going to find out about it anyway.
I thought about running away from home that day.
Instead, I showed him the report card.
And he beat me. I let him hit me. He chased me down the steps of our house (no one else was home) and he told me that I was stupid. He said a lot of other things, but when he told me I was stupid, well, that hurt more than anything else. He chased me down the stairs and beat me with his boot.
I’ll pause here and ask you: what would your reaction be?
When he was finished, he trailed off into the master bedroom and left me in the hall. He was still yelling at me from his room. I didn’t know what to do. I didn’t know if I should throw myself from my bedroom window, run to my friend’s house, or call the police.
Instead of doing any of those things, I simply returned to my bedroom and studied. No one was going to call me stupid.
I have since graduated from medical school. My dad remained violent. He eventually lost custody of my brothers and sisters. But I seriously look back on the day I brought that report card home, and I realize that he’s the one that failed. It turns out I wasn’t stupid.
Our reactions to the bad things that happen to us are completely within our control. The things that happen to us – well, that’s an entirely different story: sometimes we control our circumstances and sometimes, as in the letter above, we don’t. Choosing to lose hope would have left the letter-writer with hardly the will to live. Now she’s living a life of care – tending to the needs of the sick. We are all better off that she decided to reject the enemy of depression.
When you trade currency online for a living, you’re going to get burned eventually. At times like that, it’s easy to lose hope. When you lose hope, you lose everything. You’ve beaten yourself. The best solution to this is to get the help you need to improve your discipline and your trading abilities.
It’s not enough to just have a positive attitude, and falsely believe that everything will turn out okay. You have to get up and do something.
About Rob
Rob Booker trades profitably for his own account and manages money for others. Rob has trained hundreds of fx traders around the world. He has helped them develop their own trading systems, but more importantly, Rob focuses on helping traders deal with the mental, psychological, and discipline issues related to training. For Rob, successful trading is more mental than anything else.
Read Rob's blog at: http://www.piptopia.com
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Book Synopsis
"The Currency Trader's Handbook" is the first published form of Rob Booker's ebooks on currency trading. Included are money management strategies, trading systems, and a focus on how to develop the mental toughness to profit in the world's most volatile trading environment.
The book can be purchased from here.
