Trading Tip: Know What You Are – Be That!

marketwizardsMy favorite books relating to trading are the Market Wizards series by Jack D. Schwager. I always find myself going back to them and picking up little nuggets each time I do. If you haven’t read these books, I highly suggest you get to them.

In one of the books there is an interview with Steven A. Cohen which features a fantastic piece of advise. In response to the question “What do people do wrong?”, Steven dropped this little nugget:

You have to know what you are, and not try to be what you’re not. If you are a day trader, day trade. If you are an investor, then be an investor. It’s like a comedian who gets up on stage and starts singing. What’s he singing for? He’s a comedian.

This may sound like common sense but in the trading world there are so many things going on that it is very easy to lose yourself in the moment. Emotions like fear and greed kick in which cause you to stray from your plan and soon you find your discipline wavering.

To be successful you need to tune out all the noise and stick to your plan. You need to know what your plan is. You need to follow that plan. Stay disciplined.

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