The constant evolution of a trader comes from the attempt to minimize the distance between what one should do (strategy) and what one actually does (execution). The endeavor to close the gap between these two is a career-long challenge. After multiple years of trading your tool-box of strategies should be brimming, your risk-management skills solid, but what constantly differntiates the mediocre traders and the great traders is this distance between what they know they should do, and what they actually do. Ideas are a dime a dozen, but it’s the execution that will make or break you.
Treat trading as a job. Imagine washing toilets for 8 hours straight and then your boss coming to you and saying, well actually I’m going to take back the last 5 hours of your pay and will only pay you for 3 hours. Losing in trading is inevitable, but it has to hurt you — if you’re going to lose money it has to be on a trade that set up great but just didn’t work. Those are the losses that we like — they don’t put us in a bad mood. A loss from a trade that you would not hesitate in taking again. Most traders like trading, for them it’s a great job, much better than for example, washing toilets. And the money can come in fast — the normal correlation between time spent working and income occurs at a much different rate than in other jobs (at least from an hourly/daily point of view for daytraders). And maybe because of this they act fast and loose.
This is the reason we like having a pre-defined plan from the night before — it helps us execute well. A pre-defined plan gives us conviction and conviction and good execution (trading tight and disciplined) go hand in hand. Every single trade should count — and you should take the money earned from the job as seriously as the guy counting the hours washing the toilets at the city park.