Trading success depends almost entirely on discipline, which accounts for roughly 90% of profitable trading outcomes. The formula is straightforward: trade with discipline and you will profit; trade without it and you will lose. Following core trading rules consistently enables traders to execute profitable trades more frequently and reliably.
The Foundation: A 20-Year Trading Journey
For over 20 years, I have worked as a professional trader and member of the Chicago Board of Trade (CBOT). During my career as a scalper, I have traded across multiple markets: 30-year Treasury bonds on CBOT, the S&P 500 index on the Chicago Mercantile Exchange (CME), and financial futures on the London International Financial Futures Exchange (LIFFE). Today I trade E-mini Dow futures on CBOT.
I earned a bachelor’s degree in business administration from the University of Denver, though I was never an exceptional student. I have no formal training in technical analysis—I cannot even calculate Fibonacci levels or moving averages from formulas. I also lack formal education in fundamental market analysis and do not understand the causal relationship between Federal Reserve Open Market Committee (FOMC) actions and Treasury bond price behavior.
Yet I have succeeded for over 20 years. The answer is simple: I trade with discipline and respect the market. When an entry is wrong, I close the trade immediately. When an entry is good, I control greed. Small profitable trades and small losses suit me perfectly.
My mentor was David Goldberg, one of the most accomplished traders at CBOT. He scalped wheat futures spreads while leading Goldberg Bros., one of the largest clearing firms of its era on CBOT, CME, and the Chicago Board Options Exchange (CBOE). He taught me the rules of trading discipline, and by following his guidance, my results improved steadily.
The Wheel of Success
What I call the
FAQ
What is the most important trading rule?
Discipline is the foundation of profitable trading, accounting for approximately 90% of success. This means following your trading plan and risk management rules in every single trade, every single day—without exception.
How much should I risk per trade?
Risk no more than 1-2% of your trading account per trade. Position size must be determined by the dollar amount you are willing to lose, not by how much you hope to make. If you experience two consecutive losses, reduce your position size to the minimum on the next trade.
When should I exit a losing trade?
Exit immediately when you recognize a trade is losing. The first loss is the best loss. Do not hold losing trades hoping the market will reverse. Close the entire position at once—never close losing trades in parts. Successful traders typically experience 33% losing trades, 33% breakeven trades, and 33% winning trades, but they cut losses quickly to stay profitable overall.
