What is the #1 killer of burgeoning trading careers? You could make a lot of arguments here—anything from impatience to bad money management. But time and again, one word you will hear mentioned again and again in the binary options trading community is “discipline.” A lack of discipline can destroy a trader. Actually, it is even worse than that. If you lack discipline, chances are good that you will never even become a trader.
What exactly is discipline? You can define it as the ability to obey rules—in this case your own rules and those of the system that you have chosen to trade with. If you lack discipline, you will break your own system rules all the time and make poor trading decisions. You may also break rules regarding your scheduling and work obligations; you may just decide to skip out of a trading session today and a studying session tomorrow. Before you know it, you have given up on trading (and it is way more common than you might think).
The thing is, staying disciplined requires something else called willpower. Willpower is even harder to define, but most of us know when we do not have it. A lack of willpower is exactly what causes discipline to fail. You know you need to put in another hour of trading today, or you know you need to stop your tilting behavior, but all you can think and feel is, “I just do not have the willpower to do it today.”
When Willpower Runs Out
Today I am going to offer you some ideas for bolstering your self-discipline. In particular, I am going to suggest that you learn how to stop making so many decisions in your trading, and that you instead switch to a commitment mindset.
But first, I want to talk more about willpower and what happens when yours runs dry.
You may think that it is a myth that willpower can simply “run out.” You might feel this way because of statements other people have made to you. When you fail to follow through on a task or complete an assignment, what do people say to you? They say, “You just do not have enough willpower to get things done.” But the tone of what they say delivers the real message. What you hear is scorn.
That scorn tells you that only you lack this precious commodity of willpower. It is a value judgment against you. If willpower simply “runs out,” why does it not run out for other people? Why would anyone judge you for your struggles to stay disciplined unless they simply could not relate?
Why people behave this way is something I cannot guess, save to say that they may have been equally misled at some point of their lives. Regardless, here is the truth:
Willpower is NOT static. It is dynamic. It ebbs and flows throughout the day. It CAN run dry for a day.
There is a lot of research backing this these days. One key finding which crops up in a number of studies is this:
Willpower is depleted through decision-making.
This is very important where trading is concerned. Think for a moment about just how many decisions you make each day when you are trading:
You decide today that you are interested in becoming a professional trader (you may find yourself making this decision some days and not others—this is very typical).
- You decide today that you will catch up on your studying and testing.
- You decide today that you will demo test a new method.
- You decide today that you will go live with another method.
- You decide today that you will watch a certain set of assets.
- You decide today that you will take a certain trade setup.
- You decide today that you will get out of a certain trade early.
- You decide today that you will stop everything you are doing for now because you lost money for a reason you do not understand.
… And on and on it goes.
Each one of these decisions eats into your willpower, making it that much harder to go on.
Looking for the research?
In one prominent study, students were split into two groups. One group was given cookies and permitted to eat them. The other group was given cookies and radishes, and was asked to refrain from eating the cookies and eat radishes instead—an act which required willpower and decision-making.
The students were then given challenging geometry puzzles. The students who gave up soonest were those who were asked to resist the temptation of eating the cookies.
Here is another intriguing study. This study researched 1,112 parole rulings over a 10-month period. It was found that judges were more favorable with parole decisions if they were working in the morning or after a break. At the end of the day or after a long stretch without a break, they denied more paroles.
This is a particularly excellent example, because a judge literally does nothing all day but make decision after decision. You can see how this process is exhausting, and eventually leads to judgments being handed out pell mell without regard to whether the judgments being given out are appropriate. The judge no longer has the willpower to really think through a case.
In binary options trading, when you make decision after decision—as you are required to do—you exhaust your willpower. Trading is self-employment, and this is one of the toughest things about self-employment. Nobody is there to tell you what to do. It is all on you.
In theory, having a system actually should (and can) alleviate some of this exhaustive decision-making. The problem is that most traders do not understand or practice real commitment.
Commitment can be defined in a couple of ways:
1. The state of being dedicated to an activity.
2. An obligation which restricts freedom of action.
The idea of “restricting freedom” may seem inherently limiting and objectionable to some people, but it is an oversimplification to look at it that way. When you commit yourself in your trading, you do restrict certain freedoms. You take away your freedom to give up, or to break your own rules. But you give yourself the freedom to actually succeed. How? You stop making endless decisions.
Instead, you do this:
You make a decision ONCE.
Making a decision once is a deeply powerful thing. When you make a committed decision, you restrict your freedom to go back on your rules. You create your own internal chain of command. You are no longer at the mercy of your own shifting whims. You have become a part of something greater—you are truly dedicated to your own success.
At that point in time, you become a lot more powerful. You quit wasting willpower deciding each morning whether or not you are really interested in trading for a living or not. You wake up with that decision already made. You stop vacillating on whether to follow your system rules or break them. You already made the decision once to stick with your rules unless you have a very good and concretely-defined reason to bend or break them.
Obviously there is no way to remove 100% of your decision-making each day, but that is okay. You do not have to. When you remove unnecessary decisions from your path and commit yourself to your trading and your method, you free up your willpower to make smarter, more profitable decisions when you are called upon to make them.
Through this simple change in your approach to trading, you can find the self-discipline you have been lacking. Your willpower will still ebb and flow throughout the day, but you will find that trading becomes a lot more manageable. So sit down and ask yourself if you really want to become a trader. Make a decision once, when you are truly ready—and watch as it revolutionizes your life.