Discipline IS the key to success, and like all trading skills must be practiced everyday. You can LEARN to be disciplined with practice, but it is difficult to do and to just say "don't do that" is just another idiot preaching at you from a soap box....so I have a practical excercise that will do the following things for you:
- It will allow you to practice discipline every day without fail
- It will increase the funds available to you in your trading account
- It is an enjoyable experience that has NOTHING to do with trading except the above two mentioned points
The following applies to those who love coffee, and I'm willing to bet that all you scalpers out there who trade all night long are into coffee in a BIG way.
I don't know about you but I LOVE coffee and don't miss a chance to stop at my near by Starbucks for a Vanilla Latte (my favorite). Until one day I started adding up the numbers. Even if I buy a cheap run of the mill "house" coffe, I'm paying on average (nationwide) $3.25 per cup of coffee...that's $65 a month if I only drink coffee on week days. So I decided to try an experiment.
I bought a cheapo espresso machine at target for $40, and a pound of Starbuck's finest (french roast) for $8. I found that the first month I saved $17. (not counting milk). The next month I saved, $47...you get the picture. So what does this have to do with discipline?
How many of you would be willing to buy an espresso machine and coffee and NOT buy the finished latte? Oh, oh, I see the hands going up. Sounds reasonable. Now how many of you will COMMMIT to putting $3.25 into a jar next to the espresso machine every SINGLE TIME you make a latte? THAT is the discipline...put the money in the jar and watch the jar fill up. At the end of the month, take the money, buy your coffee for next month, and deposit the rest in your trading account. Little by little watch your account grow even while you are demo trading.
A few "numbers" to think about:
- Coffee (avg/lb) = $8.50
- Espresso Machine = $40-80 avg. get a cheap one who cares
- Avg. Cup of coffee (US) = $3.25
- A cup of coffee every day (365 days) = $1,186.25
- Two pounds of Coffee/month = $204
- Yearly saving on coffee (money to deposit in your trading account) = 982.25
OK, ok, ok...its not a king's fortune, but that's not the point is it? See how quickly you lost sight of the goal? The goal is DISCIPLINE! EveryDAY you put the $3.25 into the jar...COMMIT to it. Every MONTH you deposit that jar of change into your trading account. Make it a habit. PRACTICE Discipline. Learn to be follow your own rules.
This translates directly to your trading. It is the SAME skill. Don't enter if your method says wait. Don't hold, if your method says exit. If nothing else keep you losses equivalant to the money you gain from your coffee "sales", while you are learning. When you can take your coffee money and make a solid 25%/ year on it graduate yourself to "real" money. This too requires...you guessed it Discipline!!!
