InvestorQ : What is discipline in trading and investing and does it really matter?
Dhwani Mehta made post

What is discipline in trading and investing and does it really matter?

Riya Dwivedi answered.
3 years ago
Discipline is a must in all walks of life. It is just that in the case of trading and investing, the concept of discipline becomes all the more important. One of the key pre-requisites for success in investing is discipline. What exactly is discipline in investing? It is essentially about religiously following a set of rules that will determine the framework of your trading and investing. The following are examples of discipline that traders and investors must maintain…
Investing discipline is all about investing regularly and in regular quantities so that time and compounding work in your favour to help you create wealth over the long-run. This is called the discipline of consistency.
Stop loss discipline is the discipline of keeping stop losses while trading, irrespective of whether you are on the long side or on the short side. A stop loss is a basic loss that you are willing and able to take; beyond which discipline dictates not to hold on. Even in the case of investments, it is always better to have a stop loss concept in place.
Profit booking discipline mandates that when you get opportunities in the market you book profits on your trading position so that you always have cash available when opportunities present themselves
Reinvestment discipline is the rule that whatever dividends you earn on your investments get reinvested in equities so that you actually get the full benefit of the power of compounding.