Do you ever beat yourself up for not having the discipline to stick to your system?

Do you ever beat yourself up for not having the discipline to stick to your system?  Call yourself names like “stupid head”, “idiot” or other such put-downs? Sit there and replay the mistakes of the day over and over again, wondering “Why in the heck do I keep doing that?”

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I expect that you’ve done it at least once.  I’ve done it.  Everyone in trading does it at some point, sometimes repeatedly over months or even years.

On the surface, it seems like a natural conclusion that if you’re not sticking to your system, then the problem must be you, right?  After all, with trading, it’s not like other businesses where you have other people to blame, like employees making the bad decisions.  Here, it’s just you, your system and the markets, so it has to be you.

Of course it can’t be the markets.  They’re just the markets.

And naturally it couldn’t possibly be your system.

But wait just a minute…   Or could it?

The Culprit Is Hiding in Plain Sight

It seems like such a simple matter:  here is the system with its rules and indicators, and all you have to do is follow it.  So how is it possible that your trading system itself can be causing you to hesitate, freeze up, get out early, or over trade?

The answer came to light while helping traders work through specific ‘trading psychology’ issues like hesitation, overtrading, inability to pull the trigger, being unable to stay in trades and such over the last 6 years.  While exploring the emotional flare ups that were happening in the moment of difficulty, I found a correlation between the specific points in their trading flow and the issue at hand.

Further observation found that this existed with nearly every single trader having difficulties.  It became part of my standard coaching practice to attend to this matter first with clients, because once we got their system issues corrected, attending to the other problems became easy, and without fixing their system deficiencies, other solutions only seemed to last temporarily.

This was very clear evidence that their system really was the culprit behind their ‘discipline breakdowns’.

Upon Further Reflection, It Makes Complete Sense Too.

At first this seemed a bit counterintuitive, but upon further consideration, the reasoning became clear.  After all, traders aren’t normally ‘undisciplined’ people.  They’ve demonstrated good discipline in numerous aspects of their lives.

Another common trait among traders is that they have also demonstrated the ability to achieve success already in their lives, so it’s not a fear of failure or success.  It’s also clear that traders must be okay with money, making money and accumulating it, because otherwise they wouldn’t be in a position to trade.

So the problem logically is NOT one of discipline, it must be something else.  There must be something else that is actually the CAUSE of the problem, and the difficulties with discipline are merely the symptoms of the underlying issue

A Huge Mistake Traders Make

It is easy to think that just because you have a good strategy in hand, that you also have a solid system.  But the two are not one and the same.

You can have a very sound strategy, and even a proven method, but a lousy system.

This happens all the time, even to professional traders and trading system creators.  A common problem in the trading world that plagues both system creators and users of those systems is where a veteran trader packages up a system that they’ve developed, then release it to a group of traders, but then a short time later, most users are frustrated, not profiting and no longer using the system.

This frustrates both the creator and the users because the users feel that they’ve been scammed or that they’ve simply failed, and the creator knows that the system works but can’t convince anyone because they aren’t getting the results he or she has with it.

The bottom line to the matter is that if you try to trade with a system that has functional issues and lacks necessary qualities, you are very likely to have difficulty trading with it and particularly being consistent with it.

How The Quality of Your System Affects You

When you try to trade with a system that is poorly constructed or is lacking certain qualities, it makes it difficult to follow and use.  You have likely experienced this at least once in your trading career.

You hit those points in your system where ‘what to do’ is missing, confusing or not very clear – and these are the times when you’ll feel that anxiety rise up and doubts and the feeling of insecurity appear.

Those weaknesses in how your system is constructed are essentially ‘invitations’ for your emotions to come in and make the decisions that should be made by your better judgment.  When your emotions flare up, it is often your subconscious letting you know that something isn’t right.

Another Gross Error – And The Real Root of The Problem

Without giving the matter proper consideration, everyone seems to take for granted how a trading system gets put together and no one seems to question the quality or user-friendliness of the trading system itself.

They only challenge the strategy or indicators and rules used in the system.

The error and root of the problem is that everyone thinks they know how to recognize a good system (in contrast to strategy or method), or fix one that has issues.  Because they lack this know-how, they live with disappointing results, needless beat themselves up for not being disciplined, and/or continually change systems looking for one that works, passing over several winners simply because they didn’t see them or know how to capitalize on them.

Does Your System Have Problems? Here’s How To Know It’s Solid

One of the aspects of Quality Assurance that I appreciated most in my years as a Quality Engineer, is how confidence and consistency are at the heart of good business.  This is especially true in trading and a primary reason for the trading wisdom telling you to document your trading system.

It’s well-known and well-substantiated in the rest of the business world, that a well-documented process will out-perform and undocumented one all day long.  Among the qualities of a properly documented system are that it should be clear and complete.  If you find that you have difficulties sticking to your system, particularly on a repeated basis, then that is a strong sign that your system needs attention.

One of the four main aspects of the psychology of trading is that of making sure that you have good tools with which to work.  Trying to trade with a trading system that is lacking is like trying to play golf with bent clubs or trying to play tennis with a loosely strung racquet – it will require much more effort than it should and produce lesser results than if you have good equipment.

If your system is lacking, it represents direct functional issues in trying to use it.  Even if you manage to force yourself to be more disciplined, your subconscious will make sure to let you know that something is not up to par and will ‘correct’ the situation by thwarting your efforts.

Always keep in mind that trading psychology means much more than just focusing on being more disciplined.  As you’ve discovered here, what appears to be a lack of discipline can actually be a symptom of a completely different issue.