10 ideas for strengthening discipline

2. Stick your plan above the terminal. Check the plan before entering a trade. If you missed the opportunity – it is not your trade.
3. Set achievable goals for a day. For example, not to make USD 1 thousand a day, but make losses not more than 5-10 ticks in each trade. Praise yourself when you achieved the goal. It is important to praise yourself, since you consolidate your success. It works the same way as it works with Pavlov’s dogs.
4. Trade by your schedule only. For example, from 16:00 until 18:30. Put emphasis not on a number of trades, but on the schedule. It is your working day. Yes, it is a brief one because it is a hard work. You should start and end your working day on the schedule. Do not set the goal of a number of trades or money amount you want to make when you are still a beginner, since it creates tension and interferes with an adequate assessment of trading situations.
5. Describe possible problems, which may appear during trading, and ways of their solution. Put this list beside the plan for a day and check it during trading. For example:

• My heartbeat rate went up to 130 – I stand up and do some breathing exercises. Nothing will happen with my open position during a couple of minutes if I use protective strategies.
• I am very disappointed because I already made two losses – I stand up and drink some water and make 10 squats.

6. Punish yourself if you violated your rules – do not trade the next day.
7. Stimulate yourself for following the rules – dessert, movie, a new t-shirt, a day-off, etc.
8. Think about trading like about something quiet and pleasant.
9. Set yourself in the right mood before trading. Meditate and read your mantras. For example, “I calculate my risks for each trade beforehand and completely accept the risk of losing a certain amount of money”.
10. Keep the log of trades. Analyze your actions after a trading session. If you write down everything but do not analyze your mistakes, you will not achieve a stable success. If you do not write down your actions, you also will not achieve a stable success.

• The log of trades and orders. ATAS automatically keeps statistics of all trades. You can pull information for any period and thoroughly study the trades where you made profit and the trades where you made losses. Monitor the average profit and average loss attentively. If the average profit is higher than the average loss, you can make more mistakes and execute loss-making trades. We analyzed this calculation in the article about setups.

Compare the data with loss-making trades. Keep statistics by the days of the week. It could be that you always make losses on Monday, since it is difficult for you to get back to the working mode.

• Protective strategies – you can set different variants for different instruments in ATAS. For example, trailing stop and take profit. 

• Сhart trader – a trading panel which displays losses and profit in the real-time mode. There are many discussions in the Internet about whether it is good or bad. You will close your position faster if you see a red minus, because the pain of losing money is visualized.

• Instruments and indicators, which allow tracing appearance of major orders: cluster search, big trades, Footprint, smart DOM and others. It might seem strange that we marked these indicators as the discipline instruments. However, if your trading strategy is based on going along with the managed money, you will not enter a trade without a signal from these indicators. You will not act out a fantasy or execute emotional trades, because the price moved in the direction you wished. There is a signal – there is a trade. There is no signal – there is no trade. This is how a disciplined trader works. Moreover, if you understand why this signal appeared, you are not just a disciplined trader, you move in the right direction to make a stable profit. Let’s check an example of a range chart (4) for a E-mini S&P 500 futures (ESU9).

As we already wrote many times in other articles, range charts are good in filtering out the market noise, because they are not connected with time. We use the cluster search indicator, which looks for asks and bids from 2,000 contracts and marks them with blue and lilac colour respectively. We also added the delta indicator to the chart, which shows aggressive behaviour of buyers or sellers in each bar.

We marked the candle, in which both major buyers and major sellers emerged, with point 1 – we get two signals from the cluster search indicator here. As a rule, such coincidences tell us about an absorption. The delta indicator will help to understand who absorbed whom in the end. The green candle with a long bottom shadow tells us that the buyers won. If you entered the long in point 1, maybe you would be taken out with a short stop – this is the probabilistic essence of trading. There is a risk in each trade. We marked this level with a black horizontal line in order to track the further price reaction when approaching it. It was possible to enter into a long position again at the testing level, marked with a red rectangle.

We see absorptions again in points 2 and 3. Sellers won in point 2. Buyers won in point 3, but their big efforts, which we see from a big delta, didn’t result in a significant price growth. We marked the delta divergence after the insignificant price growth in point 3 with a red arrow. It warns us about a reversal. Further, the cluster search shows the sellers entry only. The sellers ‘smelled blood’ of the buyers, who would exit by stops and move the price down.

It made sense to open a short position in point 2. It could have been closed in point 3 and then opened again after confirmation of the delta divergence. The levels, at which the managed money show activity, would help you to increase the discipline and not to open ‘strange’ trades.