If you read my last article, you already know about the importance of having a strategy. A strategy is undoubtedly the most important tool a trader needs when approaching the financial markets. Without a strategy you're just guessing. In the world of trading the word "strategy" is loosely used. It's an interesting word, it's a catchphrase really, that a lot of people don't actually understand. Simply put, a strategy is a series of tactics we employ while trading to achieve one or more goals under conditions of uncertainty. Proper development and execution involves strategic planning and strategic thinking.
While it's well and good to have a strategy, this alone will not equate to success. Fact of the matter is, if you have a strategy but can't back it by discipline you will inevitably fail. Failure will visit you time and time again if you do not back your strategy with a high level of discipline. I've personally found in trading, the one thing that's gotten me in trouble is lack of discipline. I'm here to tell you that discipline will save you no matter what type of trader you are...(stocks ,options ,forex etc). If you have a sound strategy employed with discipline you will survive your early years as a new trader.
For most people, the word "discipline" can be quite intimidating. Let me simplify things for you, discipline is nothing more then doing exactly what you've got planned out when given the appropriate circumstances and nothing else!! Discipline is knowing your set up and trading your set up with a pre-determined stop loss, I typically use 3-4%. Other forms of discipline can be, don't trade in front of news, look at your economic calendar understand what's happening and when, and don't trade in front of it. It's a form of understanding what you're trying to do and what your approach is. A strategy executed with discipline will keep you in the game!