Making an occasional winning trade, even when you throw your trading plan out the window, may provide a short-term pleasure, but entering trades haphazardly can adversely influence your ability to maintain discipline in the long term.
Trading is a marathon, not a sprint!
When you stop following your trading plan, you become rewarded for lacking discipline and you may start believing that abandoning a trading plan is no big deal.
An unjustified reward may increase your tendency to abandon trading plans in the future.
You may be prone to think “I was rewarded once, maybe I will be rewarded again. I’ll take a chance.”
But the positive outcomes of undisciplined trading are usually short-lived, and a lack of discipline ultimately produces long-term trading losses.
Justified vs. Unjustified Wins
It’s important to distinguish justified wins from unjustified wins.
A justified win is when you create a very detailed trading plan and FOLLOW the plan. A win that results from following a trading plan is justified and reinforces discipline.
An unjustified win occurs when you make a plan but don’t follow it or if you have no plan at all. You might be rewarded, but the outcome occurred by chance.
You might as well flip a coin or hang a printed copy of your charts on the wall and throw darts at it to help you make trading decisions.
The win is unjustified and can reinforce undisciplined trading.
Maintaining discipline is vital for consistent and profitable trading.
Trading is a matter of getting the law of averages to work in your favor.
