Randy Howell argues that trading discipline isn't about following rules, it's an internal shift that lets you face uncertainty without fear. He teaches emotion management through breathing and visualization, and developing an observing self so you notice your thoughts without reacting to them.
Achieving discipline with your trading is very important to your success. And our guest today is Randy Howell to talk about how to do that. So Randy, it all makes us nervous when we're trading. Sometimes we're uncomfortable, sometimes trading. But how do we be disciplined and take the losses when we're supposed to and achieve that discipline that we need to be successful?
You develop interior discipline. In the same way that there's fear, there's also discipline. And most people in trading, what they haven't really done is they haven't found the deep discipline reservoir of discipline living within them. And that's what the great traders end up tapping into. They tap it there and they, it's like they have someone that rides herd and it stays in discipline and it's not allowed to move out.
What does that mean when we say discipline? Is it just a matter of making sure we take our stops when we're supposed to or is it more than that?
It's an attitude. It's something where.
You feel discipline and suddenly out of that discipline, everything changes. Your posture changes, your mindset changes. And suddenly it's not just saying I'm going to put a stop here and there's my target there. It's actually the authority within the self to maintain a perfect, a wonderful peak performance set of mind.
A trader once told me that he is a good trader because he's comfortable being uncomfortable. Is that a legitimate statement? Is there something to that?
That's powerful and the TR is you're always working with uncertainty. And the difference in trading is that when you're a disciplined trader, you have a mindset you bring to trading that's highly disciplined, that allows you to work with probability. Whereas most people enter uncertainty from a state of fear and they've already lost before they begin.
Because obviously we're dealing with an incomplete picture whenever we take a trade, there's no perfect trade. You're always going to have 10 or 15 or 20% as unknown.
Yes.
All right, and then how do I, So I guess discipline then means making decisions to trade as well as getting out of a trade is discipline as well?
Yes.
All right, so how do I get better at that? That's the real question.
Well, understand this is something that already lives within you and it's really more about calming the system down. The very first thing that a trader has to do is they have to get a hold of their emotions. And it's not like you push them away. You can't. The only time you don't have emotions is when you're dead. And so it's really more about how do you manage the emotions you're in? And you allow the emotion to be present. You don't react to it, you breathe through it, you stay with it and it floats away. And then you take your attention and you start focusing on the things you know are also there. Say like discipline. And you have the uncertainty, but you're no longer in fear, you're in discipline. And you have a plan. And in the discipline, you know that the plan is going to produce probability of winning.
Is there a practice or an exercise? And we practice looking for stock patterns. We practice looking for the right trading strategy. Is there a way to practice the discipline?
Oh, gosh, yes. The system I use is through mindfulness. And I teach people how to first calm down. That's with breathing and safe place type of work where you calm the physicality of an emotion down. Then the door of the mind opens and you develop something called an observing self, where you step back and you begin to see that you are not having thoughts. Thoughts are having you, but you are not those thoughts, you are not those beliefs, and you become a chooser of what part of the self shows up in the uncertainty.
Randy, thanks for your time today.
You're very welcome.
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