8 Reasons Why Disciplined Traders Fail

Have you ever noticed that when we talk about trading psychology, the magic word almost always seems to be “discipline?”  Ask any trading guru while the majority of binary options traders fail (see more), and 9 times out of 10, the answer will be, “Traders lack discipline.”  

Discipline is a key trait for binary options success, but it is not the only one.  Just ask any disciplined trader who is still struggling.  Maybe that trader is even you.  Some traders really do put in all the energy, hard work, and commitment that others lack, and they still fail.  

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So why does it happen?  If you are disciplined and you still are not winning at trading, what is holding you back?

There may be a huge range of answers to this question, so I want to focus on possible reasons that are specific to traders with highly focused, disciplined personalities.  Any personality trait out of balance can turn from being a strength into a weakness, and discipline is no different.  When you are 100% committed to success, sometimes you carve your own path toward failure.

Here are some ways that disciplined traders sabotage themselves.

  1. Working hard, not smart

Being disciplined about working is a good thing, but how are you working?  A lot of people derive pride from working hard.  That is understandable; working hard is something which is valued a great deal by our society.  In fact, in a 9-to-5 economy where most people are paid by the hour and not according to productivity, it is arguably valued a great deal more than working intelligently and actually achieving something.

The truth is, you can work all day, every day, and achieve very little if you are not going about it the right away.  Many disciplined traders actually sabotage their success by measuring it in terms of hours they are putting in and not on money they are getting out.  

It is the “seeking” syndrome, where you enjoy telling others about how hard you are striving toward your unreachable goal.  You want to get there … but you can also comfortably strive indefinitely.  If feels good being able to boast that you work on binary options trading for 12 hours a day.  Other people hear that and they are impressed.  And you feel better about your own failures, because you can console yourself because you at least have the discipline to manage all that effort that other traders can’t.  

Remember, even failure can be ingrained as a habit, which is why discipline is nothing without focus to direct it!  You need concrete, achievable, short-term goals you can actually achieve.  Learn to value your outcomes and not just your hard work.  Work is only that—an outpouring of energy.  If that energy does not accomplish anything, why value it?

  1. Treating eating and sleeping like optional activities

One of the biggest ways that disciplined traders hold themselves back is by sacrificing physical needs in the pursuit of greatness.  Eating nutritious homemade meals falls by the wayside.  Who has hours to spend cooking when you can just grab some microwavable noodles and keep trading?  And sleep … what a waste of time!  Nobody gets rich in their sleep after all.

But when you start giving up healthy meals, sleep, exercise, and other essential physical routines to take care of your body, you also are straying from the path of success.  You may not feel the effects of it in the beginning.  As time wears on, though, your habits will wear down on you.  Spending endless hours trading while you are sleep-deprived, hungry, and sedentary will take a toll on your physical and emotional health.  You will feel constantly fatigued, and you will find your trading performance dwindling into dust.

You are not a machine.  It may be tempting to behave like one, but you will break down eventually.  And maybe you already have.  Failure is draining enough without adding physical collapse to the mix.  But it could just be that your neglect of your physical needs is exactly what is driving your failure.  Try getting some sleep and exercise and eating right.  You may very well notice a turnaround in your trading.  

  1. Becoming addicted to trading

Highly disciplined traders may be susceptible to addiction.  In fact, it probably starts out as addiction to work.  If you are a workaholic, you are already an addict, but society looks on workaholics as acceptable addicts.  In fact, addiction to work may even be treated like a virtue.

But it isn’t.  By definition, it is destructive.  When you are addicted to anything, it becomes everything in your life, and everything else becomes expendable.  You also believe that you are getting somewhere, when in fact you are getting nowhere, and may even be going backwards.  

Whether you are addicted to work and trading is just a part of that, or you are specifically addicted to trading, it will wreak havoc on your life.  Here are just a few problematic outcomes of addictive trading:

  • Overtrading.  You take every trade that comes along, whether or not your system tells you to.  By doing this, you lose money.
  • You pour money into trading that you cannot afford to lose, but you tell yourself it is simply a sacrifice you are making because trading is so important to you.
  • You also sacrifice relationships, your day job, and other activities you enjoy along the way.  

Addiction to trading is a serious problem, and it is never one you should cloak under the guise of “discipline.”  It can be hard to tell the two apart, but if your “commitment” to trading is only costing you money, and you are neglecting other priorities, you are probably an addict.  If you are really committed to trading, you will first have to redirect your discipline toward overcoming your addiction.  Then you can get back to trading.

  1. Setting unreachable standards

As a highly motivated person, another mistake you may be prone to is setting standards which you are unlikely to ever reach.  For example, if you are backtesting a trading method, you may have decided that you will only start trading when you have achieved a 90% win percentage.  This sounds great on the surface.  You are disciplined; you have a plan and you are sticking to it; and you will not go live with anything less than the best performance.  

The problem here is that 90% is extremely high, and while it may be possible, it is still highly unlikely you will get there.  And so what if you do?  What is the point in wasting a year striving for 90% when you could start trading today with a perfectly awesome 82% win percentage?  

The ironic thing about being disciplined is that sometimes, your discipline actually masks your excuses.  You may be nervous about taking the next step, and so you create endless steps in between so you can stay busy.  Since you are working hard, you feel justified, even though you are not moving forward.  And then you wonder why you are not successful yet.  

Eventually, you are going to have to take that next step that you are scared of.  It is the only way to move forward with your trading career.  You cannot expect perfection from anything in life, including your trading stats.  Eventually you need to learn to recognize and accept what “good enough to profit” looks like, and go for it.

  1. Trading rigidly and resisting change and adaptation

I would say this is probably one of the biggest downsides that can go with a disciplined personality.  When you are disciplined, you are good at following routines.  All that control and repetition takes a fair amount of rigidity to see through.  You have to stay on your straight and narrow path even when there are distractions and changes in the world around you (and the world within your head).

But sometimes, changes require your attention—and your flexibility.  When you are good at sticking to routine, you may not be as great at breaking it.  You cannot adapt to change unless you are willing to try new things—and shed old habits in the process.  You have to be able to experiment and to be fluid when circumstances demand it.  

I think this kills a lot of promising traders’ accounts and careers, including traders who have actually been trading successfully for some time.  When a major change shakes up their world, these traders stick doggedly to what they know, too afraid to venture out and make changes.  They see changes as inherently threatening to their stability.  

But what really threatens your stability is when you resist change and do everything in your power to avoid uncertainty.  Recognize your discipline as a strength, but understand that sometimes you need to systematically embrace uncertainty to survive a transition in the market.  That means taking risks you may feel unprepared for and uncomfortable with.

But there is no such thing as evolution without danger; growth is spurred through the rigors and tests of life.

  1. Lacking perspective from other activities

If you have an introverted personality, you may thrive on delving deep into one particular activity.  That is a great boon for trading.  But no one thrives on dedicating 100% of their time, energy and attention to a single thing.  When you spend all your time doing the same activity over and over again, you are engaging in tunnel vision.  You no longer are getting perspective from other activities.

The most amazing insights you have about trading may come while you are doing something else altogether.  Reading blogs by successful traders, you will find that many traders have life-changing realizations about trading while taking a walk in the park, watching a basketball game, or even going on a vacation overseas.  When you expand your horizons and take part in different activities, you refresh your energy and your mental clarity.  You make connections you never would have seen looking at the charts.  

  1. Lacking emotional balance

When pour yourself 100% of yourself into any pursuit, it is a guarantee it will destabilize you emotionally.  For one thing, you forego other enjoyable activities which help you to relax, and you may also not be spending as much time with the people you love.  

For another, you may have all your self-esteem tied up in your trading.  This means that if you are not winning, you may not have any esteem from other activities or relationships helping to balance out your despair.  This puts you in real danger of developing burnout with trading.

  1. Letting pride cloud sound judgment

If you are proud of your commitment to trading, you may sometimes let that cloud your judgment, not only of your trading, but also of your commitment!  As I mentioned earlier, it is easy to mix up commitment with irresponsibility.  Two things which shouldn’t look more different can appear quite similar when you are trying to learn a new trade.  

You should be proud of working hard and investing time and energy into trading.  But you should not allow that to blind you from seeing when your hard work is not getting the job done, or when you may be wasting time and money by not focusing your efforts with precision.  

Temper Discipline with Adaptability, Balance, and Focus

In metallurgy, tempering is a process through which steel is toughened so that it can withstand greater pressure and stress.  Somewhat counter-intuitively perhaps, this process actually involves reducing the hardness of the metal.  This actually boosts its ductility.  The resulting material can stretch and bend, and is less likely to break.  

If you think of discipline as your steel, you do not want a brittle blade.  You want something that can withstand stress, and sometimes that is something that is willing to bend—to adapt.  In trading, when discipline becomes hard and brittle, it renders the trader breakable.

To protect yourself, temper your discipline with qualities which will give you the ductility you need to survive and to grow.  Those qualities are adaptability, balance, and focus.  

  • Adaptability empowers you to embrace and grow through change, evolving and becoming a better trader.  It keeps you from turning your working routines into a confining cage.  
  • Balance meanwhile lends you perspective and fosters your physical and emotional well-being.  It helps you to achieve greater insights and to appreciate the other forms of wealth which you are blessed with in your life.  
  • Focus keeps you from draining your time, energy, and money into working hard without achieving your goals.

These traits will help you fine-tune and balance your discipline, tempering and honing it into a powerful attribute.  When your discipline is balanced with these other aspects of your personality, it will always serve you as a strength, and never transform into a weakness.

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  • CA Traders Accepted

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