I had a recent poll online where I asked traders: “What is the most important element for profitability in your trading?” They had four options. Was it entries? No, entries are not were money is made, it is in the exit with profits (13% votes). So exits are the most crucial? No, size of wins and size of losses will determine profitability not just exits (13% votes). So, it’s position sizing? Trade size can make you or break you as a trader but is still just one element and part of the big process (17% votes). What was the winner with 57% of the votes? Discipline, this is the most important element of trading. If you don’t have the discipline to take your entries, take your exits, and position size right then they do not matter. There are many ways to make money in the stock market, value investing, growth investing, CAN SLIM, day trading, swing trading, trend following, and even buy and hold investing but without the discipline to do the work to develop your own system and follow your own trading plan, no system will make you money. Discipline is one thing all successful traders share.
