Some points of discipline to observe before any trader initiates a trade. Always measure a trade for the following criteria, and you will find that, you will end up taking a fewer but more fruitful trades : 1) Trend 2) Range 3) Entry 4) Exit 5) Stop loss.
1) Trend : Most trades, would not be initiated in the first place, as most novice traders are not sure about the trend.
2) Range : Baring the breakouts and breakdowns, the markets move in a range most of the time.
3) Entry : Most traders get sucked into a trade, after looking at sharp fluctuation of prices, which is a wrong practice. Entries need to be planned. ( Deliberate use of the words sucked and planned ).
4) Exit : Once entry has been made, the market decides the further course. Either the target is achieved or we get stopped out.
Even if the trade is in your favor, it is always better to come out a couple of points earlier than your expected target.
5) Stop loss : Stop loss is a discipline which protects your capital. I have heard ridiculous arguments form traders, saying that, "Stop loss always gets triggered."
Inculcate a habit to consider these points before initiating a trade and one can avoid most mishaps. Most mishaps, in the markets, develop into epics, simply because a stop loss is not employed.
Many people start as traders, then they are forced to become investors, and finally they become analysts.