Holding Your Nerve: The Importance of Discipline
Much is written about why it's important to have a spread betting strategy and a defined approach clear in your mind for successful spread betting. Countless seminar hours are devoted to discussions as to why successful trading needs and depends on structure, and how you can make substantially more progress by structuring your technique. But just as key to trading success as having a strategy is having the ability to stick to it. Possessing discipline and the ability to stick with your trading style is one of the most valuable traits a successful spread bettor can have. But why exactly is discipline important, and how does it factor in to the successful trading puzzle?
Arguably the primary reason for discipline being a key ally of successful traders is that it works to override emotional decision making. Emotional decision making is one of the most consistently fatal flaws of traders, and even those that are used to working under pressure can feel strong impulses to act in certain unhelpful ways when faced with the prospect of earning or losing not insignificant sums of money.
Like the gambler who keeps chasing bigger wins, spread bettors can get too easily caught up in the thrill of trading, and as a result can make rash decisions. Only by developing the discipline to trade in a slow, steady and patient way can you be sure of actively minimising your risk, which in turn will maximise your opportunities to profit from the markets.
Sticking To The Plan
Strategies work pretty effectively, but only if they are followed through on a consistent basis. Any deviation from the plan is potentially fatal - whether or not it feels right at the time. One of the key benefits discipline brings to your trading is that in addition to helping remain calm under pressure, discipline breeds consistency - consistency in research, consistency in executing trades, and consistency in decision making. Without consistency, your trading portfolio can quickly descend into gambling, and sporadic decision making will always lose out to reason, logic and calm thought processes.
If you feel an inclination to waver from the plan, say for example to cut out a profitable position early just to bag a few points, remind yourself of the value of your strategy. Strategies have been devised and refined to deliver successful outcomes, and you can rest assured that far more accomplished traders than yourself have executed on these very same blueprints, and leapt the very same hurdles you face.
Discipline is one of the key virtues of successful spread betting, and developing a disciplined approach is something you should endeavour to do without delay. The more disciplined you are in sticking to your strategy, the more likely you will be to see consistent and significant trading successes. Have the confidence in your strategy and the faith in the outcomes it provides to back your trading decisions, and you will over time notice more consistent, more successful spread betting.