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The Top 10 Reasons Traders Lose Their Discipline

Download Your FREE Wrap Now 2 Dec 2014 7:23 PM

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Dr Steenbarger is the author of ‘The Psychology of Trading’ (Wiley, 2003), ‘Enhancing Trader Performance’ (Wiley, 2006), and ‘The Daily Trading Coach’ (Wiley, 2009) with an interest in using historical patterns in markets to find a trading edge.


He is also interested in performance enhancement among traders, drawing upon research from expert performers in various fields.  A valued contributor to Jim Berg’s Investing & Online Trading’ Report since its launch in 2005, we thank Dr Steenbarger or the following article:

Losing discipline is not a trading problem; it is the common result of a number of trading-related problems.

Here are the most common sources of loss of discipline, culled from my work with traders:

10) Environmental distractions and boredom cause a lack of focus;

9) Fatigue and mental overload create a loss of concentration;

8) Overconfidence follows a string of successes;

7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;

6) Loss of confidence in one's trading plan/strategy because it has not been adequately tested and battle-tested;

5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;

4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);

3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;

2) Not having a clearly defined trading plan/strategy in the first place;

1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.


In today’s FREE Stock Trading Wrap -  Dr Steenberger continues this topic with "Trading Discipline: Cause of Problems or Effect?", culled from his work with traders.

To download your FREE copy of today's FREE Stock Trading Wrap, simply  Click Here Now ==>


May you trade with 'Weight-of-Evidence',


Jim Berg and the ShareTradingEducation.com team  



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