Acquiring Trading Discipline Quantitatively by Sebastien Garcia
Systems With A Cause
To trust your trading system you need confidence, which in turn leads to discipline. Here’s a simple yet powerful process that can help you to trust your system.
Discipline is often pointed to as the single most important quality that an algorithmic trader must master in order to become successful. System trading requires consistent execution, regardless of emotions. Yet discipline is constantly threatened by fear when a drawdown comes up.
OVERCOMING THE FEAR
In the mental endeavor that a trader faces, one factor precedes the acquiring of discipline. Without it, discipline invariably becomes unsustainable after the first meaningful loss. The factor? It’s trust in the system that you trade. Trust is the key to turning blind faith into confident trading, the type of confidence that will lead a trader to keep executing a system’s signals through exciting new equity highs as well as dire new lows, without questioning or interrupting his trading.
Acquiring trust is possible through a simple yet powerful process that must be implemented before trading any system live.