In my previous article, you now know one of the main factors to be lack of discipline due to which most of the Traders fail. But how do we achieve discipline then? Below are some ways which helped me and are continuing to help me to achieve discipline.

1. Stick to Trading Plan- First of all, you should have a clear trading plan. Have clear entry, exit and money management rules. You should not deviate from your trading plan for at least 100 trades to let the law of large numbers work in your favor. You already should know the entry, exit rules before the market opens. Market hours should only be for execution of your Trading Plan.
2. Backtest- How do you achieve confidence to follow your Trading Plan? By backtesting your strategy. When you Backtest your strategy then you come to know whether that strategy worked in the past or not. If it worked, you become confident that it will work in the near future as well.
3. Position Sizing- Right position sizing is very important for you to stay on tha path to follow your plan. You need to size your positions as per your risk appetite. For example: If you take a risk of Rs. 1000/- per trade and see that loss on your screen and you don‘t feel anything in your stomach then you are comfortable. However, when you see a loss of Rs.5000/- per trade and seeing that you start to shiver and your mind stops working then it means you are not comfortable with that loss. Risking more than you can afford will not let you follow your plan. So risk well within your limits and you will automatically feel disciplined and follow your strategy.
4. Stick to Target- It would have happened few times to you that when in the trade, you missed the target by few points and then it went on to hit your SL. Now in the next trades, you feel the urge to book your profits early. You need to understand here that it may seriously impact your returns. If you backtested your strategy well then you should follow it. How can you do that? By not looking at your P&L position. Yes, that’s right. You should not look at your P&L position once you are in the trade. So it’s either Stop loss will hit or target will be achieved.
5. Stick to Stop Loss-  Similar to above point, few times it would happened with you that your trade hits your stop loss and then it reverses and goes to hit your target. Now here next time you will have the urge to widen your stop loss a bit hoping that it would hit your target. You keep on widening it and you will not realize that it has burnt a huge hole in your pocket. You will have wiped your account like this. So again here, you should not look at your P&L positions. Input the Stop loss in system and let the trade the do its work.

Above are some ways in which you can improve and bring some discipline in your trading.

Disclaimer- Understand the risk involved in trading and investing. The views presented above are my own personal opinion and only for educational purpose. You should consult your financial advisor before taking any risk in trading or investing.