Discipline Is the Holy Grail
01/23/2012 3:00 pm EST
Many traders are constantly searching for the next great indicator or strategy, but Tom Hougaard explains that the key to consistency and improving trading results instead lies inside each of us.
Joining me in the MoneyShow.com video network studio is Tom Hougaard. Tom, how can traders improve their performance?
Most of them don’t want to.
If they’re not making money at it, they might want to.
Well, a lot of people are very happy not making money because they wouldn’t know what to do with themselves if they made a lot of money trading.
They’re afraid of success?
Yeah, they are afraid of success. They’re sabotaging their own effort. I think it’s a code that’s set that everyone gets what they want out of the market.
Right now I’m mentoring someone who is working within an organization; she’s a very capable young woman, very, very bright, yet she will not do the work. She will not learn from her mistakes.
So, whether that’s relationships, whether that’s trading, whether that’s education, whatever endeavor you’re talking about, trading isn’t so similar or dissimilar to anything else in life, and if you really want to improve, you need to go back and you need to constantly look at what is it that I’m doing. What’s working and what’s not working?
That takes work, and when it requires work, most people are inherently lazy because whatever goals they set for themselves, it isn’t enough to psych them up, to juice them up.
So what’s the difference between, for example, me, and the trader out there who’s starting out, or the one that isn’t successful? It’s simply just determination. It’s simply just a matter of doing it over and over, and as my own mentor, David Paul says, it’s a question of repetition; doing the same thing over and over.
From David Paul: 3 Primary Rules for Swing Trading
You’re looking at sportsmen; you’re not looking to completely radicalize your trading style or your sports style, or your teaching style. It’s a question of tweaking little things.
So the best advice that I can give anyone who has aspired to become a trader, and who wants to improve their performance, stop looking elsewhere and look at yourself.
Do you recommend keeping a journal, like a diary, if it’s your life or for trading?
Yeah, sure, if you update it. If you can update it, but keeping a journal is a discipline in itself. We’ve all had a journal, and the first three or four days are filled up with notes after notes, and then all of a sudden there’s this big blank space.
Success in life is just a question of what you do every day. It isn’t one grand gesture. If you’re trying to win someone’s heart, you don’t do it with one grand, sweeping statement. You do it by being there every single day.
Consistency; and to the point where you develop a system that you could do it in your sleep.
I don’t even have a system. I just look at the market and I feel it because when you spend ten or 12 hours a day watching the market, you realize that actually you’re not watching the market, you’re just watching all the human beings.
Luckily for me—and for everyone else watching—we are creatures of habit, and that’s what we do, and so what happens in the market happens over and over.
The reason why it happens over and over is because those who are successful will want to stay in the market because it’s a great place for making money, and the way they make money is they’re not going to change their trading style, because we don’t.
We are ingrained in our habits, and to change a habit, you have to change your frame of mind, and most people will not look inside and do their hard work.