The investment genius Jesse Lauriston Livermore once stated, "An investor lacking discipline will never succeed in the stock market." One common issue is that these investors often change their strategies. They frequently listen to others and adjust their trading methods without realizing that effectively using a trading system requires time. If an investor doesn't stick to a system or method long enough—trying it for a few weeks and then switching when it doesn't perform well under certain market conditions—they end up trapped in a cycle of their own making.
Remember that no trading method works effectively under all market conditions. Our job is to persistently follow the chosen method with discipline, recognizing the market conditions when the trading strategy may underperform, in order to mitigate and devise remedies. Don’t be swayed by others; instead, "Follow your systems." Stick to your own investment strategy, take notes, and reflect on each trade: "Why did I profit? What caused my loss?" From there, draw conclusions and gain insights for future trades.
Every day, make an effort to record or remember your trading mistakes. Analyze those mistakes, especially the ones that frequently lead to losses, and strive to eliminate them in future trades. Time has shown that all successful traders have learned from their mistakes, failures, and account blowouts, but they share one common trait: they consistently analyze their errors and avoid repeating them.
