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How about Some Positive Suggestions?

Now that I have your attention, I will give you a few positive suggestions regarding trading discipline. Again, I will attempt to avoid standard recommendations.

Begin with a Simple Trading System. My years of research have revealed one important thing: The simplest trading systems often work best. Yes, I know all about the claims and the hypothetical performance records. I know all about the optimized systems and the black box systems and the virtues of artificial intelligence. But I keep coming back to the same conclusion as a result of my research: Simple systems work best. Once you have experienced profits using a simple method, you can experiment with complex systems and decide for yourself.

Be Independent, Isolate Yourself, and Remain Pure. The

trader's mind is a delicate machine. It is easily affected by the many inputs that daily impinge on the decision-making process. The futures market thrives on opinions, mass psychology, emotion, news, and rumors. The less you hear, the better off you'll be.

Most systems are correct between 50 and 65 percent of the time; however, even this 15 percent margin above chance occurrence is obviously not a large margin of safety. By allowing the input of others to affect you, this margin may be neutralized and you will lose your advantage. The ability to clearly see the markets is a great asset.

Don't Read the Market News. If you subscribe to one of the two daily U.S. financial papers, do so for technical data only. The news reports and opinions of the reporting staff are poison unless, of course, you can train yourself to do the opposite of what the majority recommends.

Don't Get More than Two Advisory Services. Actually, you're better off with one or none. If you get one service, follow it as closely as you can. Don't pick and choose from among its recommendations. Follow all recommendations or follow none. Most traders pick and choose wrong.

Use a Discount Broker. Unless you do business with a broker who is also your advisor, use a discount broker who will not bother you with opinions or pressure you with trading ideas. If you decide on a broker who will also advise you, make sure it is one with considerable experience who is not in business for the simple purpose of generating commissions. Although difficult to find, such brokers are definitely out there.

Don't Discuss Your Trades with Anyone. Discussing your trades, signals, methods, or indicators with other traders only infects them with your ideas and you with theirs. Confusion will be the end result.

Don't Read Popular Trading Magazines. Most are full of ideas that don't work. If you have arrived at your goal of self-discipline, read all you want. Otherwise, avoid trading.