Author: Chris Hood
Be sure to check out new episodes of my video podcast each week, where my ace pupil Brian Jones and I talk the ins and outs of options trading- and give you insights and strategy that you can immediately put to work for you in the markets.
I’m not going to sugarcoat it.
This is a tough market to read, especially for those without much experience.
And whenever the market gets turbulent, I get a lot of questions.
I’m continually asked by clients and newer traders what is the most essential attribute of a successful trader.
Do you need to be hyper-intelligent? Have a vast knowledge of economic theory? Maybe earn an advanced degree in finance?
The single most important thing is discipline.
Back in the mid-1980s, traders Richard Dennis and William Eckhardt developed a trading system that worked well and wanted to see if it could be taught.
It was an experiment to determine if trading success was based on expert insight that only a few possessed.
Some considered it a natural gift, while Dennis and Eckhardt believed it could be easily taught.
After interviewing a thousand potential candidates, they selected just a handful to use their system. These folks came to be known as the Turtles.
All they had to do was learn the system and follow the rules.
Intelligence had almost nothing to do with success in this experiment. Instead, it was entirely a function of how well the traders followed the plan.
When interviewed almost two decades later in the book Market Wizards, Dennis had this to say:
“I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody could make up a list of rules that are 80 percent as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”
I feel exactly the same way.
You can even trade using a more simplified method than mine and win.
It’s just that many don’t, or rather won’t.
I’m going to assume that you’re good at something.
Maybe it’s martial arts or bodybuilding. Or perhaps you’ve learned to speak another language fluently, play guitar well, or produce beautiful paintings.
Consider what it took to get that skill.
…dedicated and consistent practice over time.
It required discipline.
Those who won’t put in the time, even when the learning curve is steep, and things get difficult, never seem to get good at anything.
Frustrated, they simply throw in the towel.
In this sense, trading is no different. But, as Richard Dennis said, it isn’t that the information is lacking. Instead, it’s the inability of most to consistently follow a plan.
If you’re struggling with your trading, just be honest with yourself.
“Are you following your plan consistently?”
If you are, and it isn’t working, then your trading rules must be adjusted. However, if you aren’t following your plan, then time for some introspection and personal psychological work.
Ask yourself, “do I want to be able to make lots of money and be my own boss?”
“Isn’t it worth my time to build a useful life skill to provide a steady supplemental income?”
If the answer is no, then you really shouldn’t be trading.
But if you really want success, you CAN make it happen, and I’m here to teach you how to do it.
PS – Major congrats to my colleague Dr. Kent Moors on his recent triple-digit gain on LCID. A nice 100.83% gain using long puts in a down market. Great strategy and a nice win for the Sigma System. Check out how he did this by clicking here.