I LOVE this article by Mack of Cannon!
I wanted to send it to everyone in case you somehow missed it. The only thing I would add is something Garth Brooks told me years ago when I had a chance to interview him about his success.
Garth told me "It is your dream, don't let anybody steal it from you".
If your dream is to become a world class consistent trader - don't let anyone steal it from you!
Thanks again for reading my blog!
Doug West &
Your Friends @
by Mack B. Stevens, Senior Broker, Cannon
Trading futures is an alluring business that allows an individual a lifestyle filled with many freedoms not available to most working people. This business requires traders to posses a unique set of qualities. The most critical quality a trader needs to have is discipline.
Discipline trumps knowledge. It trumps experience. In fact, without discipline very few traders survive to have enough experience to draw upon as an asset in their trading. The need for discipline is amplified by the very structure of futures trading. The leverage available in futures trading amplifies every decision that a trader makes. Every decision, good or bad!
Everyday life requires us to constantly make decisions. Do I buy the chicken breasts at $4.95 a pound, or do I buy the hamburger at $3.95 a pound. These types of decisions are non-leveraged decisions, so the impact overall is minimal. We are not buying or selling 400,000 pounds of hamburger as we do when we trade 10 contracts of cattle, while "paying" (margins) only a fraction of its total value.
In trading futures, one needs a trading plan. Some of these plans can be purchased for thousands of dollars. Some can be learned after attending a trading school for a week or so. Some can be developed by the individual trader after months or years of research. However one comes to his or her trading plan it is useless without discipline. Traders who have their plan and then stop using parts of it during the trading day are doomed to having increasing losses, usually large ones as typically the most discarded part of a trading plan is one of the risk control components.....stop orders and/or position size. A trading plan that is implemented with the proper discipline 75, 85, or even 95% of the time is doomed. For whatever reason, traders seem to have a breakdown of discipline at the most critical and damaging times. This is damaging to their equity and their psychological balance. The greatest trading strategy ever developed will prove to be disastrous to your account if it is implemented with a lack of total discipline.
This factor is what makes or breaks traders. We all know the difficulty in maintaining discipline in our everyday lives. Be it a diet, or an exercise plan, or even keeping toxic people out of our lives, constant discipline is very difficult to achieve. This is the key reason most traders are not realizing profits in their trading. As stated earlier in this article, futures trading amplifies our decisions in a way not seen in the rest of our everyday lives. Discipline is the single most important component in a successful trading strategy. So, rather than spending another $5000 on a new "black box" trading ideas, spend some time, and money if necessary, to learn more about yourself as a person so that you can better develop the strength to maintain trading discipline 100% of the time. This is a challenge to say the least but the difference in your life and in your trading account will be staggering! Good luck with making the change. The efforts in achieving this high level of discipline will be efforts that are exciting and rewarding. Let 2009 make your trading all that it can be!
IMPORTANT PLEASE NOTE: TRADING COMMODITY FUTURES AND OPTIONS INVOLVE SUBSTANTIAL RISK OF LOSS. THE RECOMMENDATIONS CONTAINED IN THE LETTER IS OF OPINION AND DOES NOT GUARANTEE ANY PROFITS. THERE IS NOT AN ACTUAL ACCOUNT TRADING THESE RECOMMENDATIONS. THESE ARE RISKY MARKETS AND ONLY RISK CAPITAL SHOULD BE USED. PAST PERFORMANCES ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.