Discipline is a rather simple concept. You just need to define what, when and how you want to trade and manage it. You also need to decide how to handle your account when you are making money and also when bad days come along!

Psychological issues make up 90% of trading equation. Discipline is essence of all of psychological issues. It permeates throughout whole process. All rules and procedures and plans do not matter if they are not followed.

There is little doubt that for those who seek success in trading, failure rarely comes from writing wrong plan. It comes from not writing one at all, or not following one that is written!

Once you make your plan following three rules are in order:

A Big Real Estate Mistake

Many people buy and sell a fixer-upper like this: They buy a house, fix it up, then add some amount (say $10,000) that's in their head onto their costs. Then they put house up for sale for this price. This is so wrong.

Would you buy a house according to what seller has into it? Of course not. You look at what similar houses are selling for to determine value. So if you have $110,000 into a fixer-upper and similar homes are selling for $105,000, how much can you get? It doesn't have anything to do with what you've spent, does it?

The Fixer-Upper Formula

1. Determine how much house will sell for when you're done fixing it up. Ask an appraiser for help, or look at what similar houses have sold for (not list prices). What it's likely to sell for is only meaningful definition of value when dealing with fixer-uppers.