Your View of Discipline In The Market Is Incomplete
The two types of discipline you need to master (or your performance will suffer)
I was thinking about how I’ve built discipline throughout my career in the market - then an idea hit me…
Here’s a deeper look at each of the types of discipline you must master in the market:
Type of Discipline #1: Sit-Out Power
If you’ve mastered sit-out power, you can:
Sit until your setup shows
Avoid taking dumb trades and losing money on setups that aren’t the best in your wheelhouse
Remove emotions like the fear of missing out (FOMO), thus trading better when the time is right
Steps you can take to master Sit-Out Power: Use the Confidence System!
I wrote an in-depth how-to on developing sit-out power by using varying levels of confidence.
If you want to read the whole post (along with how I directly apply it), you can do so here.
In this post, here are the 3 steps I outline to mastering sit-out power:
Defining Your Setups
Grading Your Level Of Confidence In These Setups (1-10)
Turning These Levels Into RULES
You’d be surprised at how much better your trading can get JUST by mastering this first type of discipline…
But, of course, I’ve realized the discipline picture isn’t complete just by mastering sit-out power. You also have to master execution discipline:
Type of Discipline #2: Execution Discipline**
Before taking a deeper dive into the second type of discipline, I want to highlight some issues in my trading that I came over while doing some reflection (specifically point number 2):
If you’re like me, you’ve hesitated to take a perfectly valid setup before.
You do all of the prep work, have your alerts set, and are ready to hit the buy button but end up hesitating and watching the setup you should have taken run up without you.
This is one of the most painful situations I experience in the market, and this is where I realized my view of discipline was incomplete (another instance of using irritation as inspiration).
Execution discipline (and the steps I’m taking to master it):
If you have execution discipline, you can unemotionally execute your setups whenever they arise. It’s that simple.
This is the single most important area I’m looking to improve on into the end of the year.
Here’s my plan (and how you can implement it too):
Conduct nightly review, jotting down the best setups for the upcoming session (which I currently do)
Set alerts on these setups (which I currently do)
SET BUY/SELL STOPS IN BROKERAGE THE SAME NIGHT (area of focus)
That’s it. Not a ton of changes but #3 is the most notable.
If you’ve enjoyed this edition of Upside Unlimited, please consider leaving a like and comment below.
To Master The Second Type of Discipline, Set Your Buy/Sell Orders The Night Before
I’ve realized that by setting all of my orders the night before, I don’t let my fear or hesitation get in the way when I go to execute a trade when the market is open. The entry either triggers or doesn’t, and I have immediate clarity.
Here are some ways I set my orders the night before:
Buy Limit Orders if price is above where I want to execute on weakness
An associated Stop Market Sell Order that triggers if the buy order fills (OSO order).
Buy Stop Orders if price is below where I want to execute on strength
An associated Stop Market Sell Order that triggers if the buy order fills (OSO order).
There are two types of discipline. Without a complete understanding of both, your performance will suffer.
Sit Out Discipline (master this with The Confidence System)
Execution Discipline (master this by setting orders while the market is closed)
Talk to you next week.
Greg
p.s: I’m currently working on a free High Volume Close email course! This will be an awesome resource and distill the key points you need to master this setup.
Sign up for the waitlist here (it will go live later in March):
I also created a free 5-day email course centered around becoming a professional chart reader. If you want to learn more, click here: