Today I’d like to tell you about a widget that we have on the Trade on Track dashboard called a Weekly Discipline chart. This chart really keeps you in line like a big stick … at a glance, it lets you know if you’re straying from your trading rules or not, and shows how you are doing from week to week.
It’s one thing to find and refine a profitable trading method, and it’s a totally different thing to actually execute that trading method properly – that’s where the Weekly Discipline chart helps.
Sample Weekly Discipline Chart
The Weekly Discipline chart measures, as a percentage, how many of your trades are exiting at a pre-defined point. Now, these pre-defined points are points that you decide on when first entering / logging the trade, and they are the stop loss and target point(s) for your trade.
You see, when we enter a trade, we may have analyzed it all properly and have the best of intentions of executing it perfectly. The way the trade plays out can end with a totally different result however – because emotion plays a huge part in whether you follow through with your plan or not.
Novice traders (and even plenty of seasoned professionals) – will see a trade going against them and decide to jump ship, well before the stop loss is hit (and often, it wouldn’t have been hit) – that’s fear at work. Or, the trade will be going nicely and there’s plenty of runs on the board, so the trader will take profits and close the trade early – that’s fear again! Then there’s the other side: greed, when you might decide to move your target away altogether and just let your trade run.
So, even though you’ve worked hard in finding the right trading styles and methods, backtested them and decided to use them in your trading – the whole thing goes out the window if you don’t follow through with your plan by exiting the trade early.
The Weekly Discipline chart serves as a terrific tool for monitoring your own discipline and analyzing how well you’re following through on your plans. It’s amazing how a little chart can:
1) actually make you aware that you’re not following through with your trading strategies
2) make you want to improve your game from week to week.
Good luck and trade seriously!
Tags: forex discipline, forex trading, trading psychology, Trading Systems
