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Trading The Stock Market

Stock market commentary, analysis, insight and opinion of the RightLine Editors is available every Tuesday/Thursday evening & Saturday afternoon. The following is excerpted from the:

November 15, 2018 - The RightLine Report

Notes From The Editor

Thomas Sutton, EditorAlthough the technology we use to access the stock markets has progressed at a rapid rate, the human aspect of trading has changed very little over the years.

For example, I remember attending a trading convention that offered specific training on how to be a disciplined trader. While standing in a tightly-packed group of interested listeners, one fellow with a big grin on his face asked the instructor, "How much will it cost me for one pound of discipline?" Everyone laughed out loud. The general reaction was, "If it's that easy we'd all like to buy some!"

Webster defines this desired type of discipline as an "orderly or prescribed conduct or pattern of behavior." However, there is another kind of discipline that traders often use for a substitute that isn't so desirable.

It's called punishment. When self-inflicted it becomes a lethal poison that limits profits and damages personal esteem. Successful traders know how to take responsibility for their actions, yet at the same time avoid the type of destructive punishment and blame that leads to negative results.

Using the "right" kind of discipline helps us develop the self- confidence necessary to profit in a market environment where no one controls our behavior. We can trade anyway we want too. Unlike society, we set our own rules in the market.

Of course, whether we make a profit or not is determined by how well our rules perform. Without discipline, we are at the mercy of our impulses and emotions. With discipline, we gain confidence through the predictability of our own behaviors. We can then successfully project that confidence onto the markets.

Perhaps the most important element in developing the disciplined confidence of a successful trader is to realize that the market rewards those who trust themselves to act appropriately in any market condition. In fact, self-trust is an essential part of any successful trader's character.

Trade well!

~ Thomas Sutton, Editor

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