trading podcast episode 8

Why Trading With Discipline is Not a Super-Power

Identifying new trading opportunities isn’t magic. Trading your strategy is simple…if you have one! I’m not smarter than anybody, I want to help you understand how to put those pieces together.

As a team we are doing a great job of discussing order flow, then momentum, then reading the tape over the last 3 to 6 days, and then you add room-to-go. (profit potential)

So you have all of that criteria, and then you drop down to your intraday time frames. Only then do you ask which stocks right now match my higher time frames, and which ones are currently giving me a good risk spot otherwise known as acceptable risk which is relative to each of us.

And then you take the trade, only after all of that criteria lines up.

A conversation that keeps repeating in the coaching calls, is the distinction between being disciplined and trading your strategy. The trader usually believes it means you should trade less.

I can absolutely understand why that might be the thought process, but I also want to explain why that is 100% the wrong idea.

What Does Trading Discipline Mean?

Being disciplined and following your plan does not mean that you should be trading less, it means that you should only be trading ideas that match your strategy. It actually means that you should execute every trade within the context of your edge.

For arguments sake let’s say I am trading five popular stocks and each of them match my criteria to be long and let’s say now the market opens.

Let’s say the criteria is at 9:40 am, whichever stocks are above the opening price and net positive I am immediately buying with a stop loss at today’s low. That is a rather simple strategy but the point I want to make is that if all five stocks trigger and match your strategy, you should buy all five.

I can’t explain that more clearly…

Over-Trading versus Trading Your Strategy

Let’s take out of the equation how much buying power or capital you have allocated to your trading account. That is not the point of this lesson, we are talking about the global probabilities of allowing your edge to play out over time, over as many good trades as possible and as fast as possible.

I can see how that word fast implies over-trading but here is the key point- it’s not over-trading if every trade matches your strategy.

That is the point, that is exactly what most traders never learn.

Too many traders mistakenly believe if they take every trade that matches their strategy, that they’re over trading, I am telling you that is not the case. In today’s podcast we discuss the exact steps to identify an edge, and what it means to execute it flawlessly.

Become a Better Trader. Get Notified.


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