Ted Williams. The man epitomizes the word “discipline.” Trend followers, like Williams, wait for their pitch — and then whack it for homeruns.
Williams famously divided the strike zone into 77 cells the size of baseballs and tracked his batting average for each zone. He knew exactly which pitches he hit well and which he did not. His discipline was not refusing to swing. It was refusing to swing at the wrong pitch. He waited, sometimes letting count run against him, because he knew that swinging at a bad pitch was worse than not swinging at all. The analogy to trend following is precise: wait for a market that is moving with sufficient force in a defined direction, then enter with conviction and hold. Do not swing at every pitch. Do not swing because everyone else is swinging. Wait for your pitch.
Now think for a moment about investment sites such as all of the stock tip chat houses. They are useless when it comes to helping you to make money in the long run. Why? There is no discipline. They say there is a good pitch to hit every day. This is far from true.
Stock tip culture is built on the premise that the market is always offering something worth acting on. It is the trading equivalent of a batting coach who tells you to swing at everything. The natural result is a large number of swings, most of them at bad pitches, and a performance record that reflects the quality of that approach. Williams never swung at bad pitches. Trend followers never enter markets that are not trending. The selectivity is not timidity. It is the foundation of the edge.
Three Stages of Becoming a Successful Trader
There are typically three stages an investor goes through before they become successful. Building discipline starts with an understanding of these points:
1. Easy Money: The first stage involves thinking there is easy money to be made. This is the thinking of a newbie. Often, after a big stock tip gone wrong or a couple great broker recommendations that lose serious money, you enter the second stage.
2. I need a plan: The second stage begins when an investor or trader decides a plan is needed to win. The problems begin when the search for a plan becomes a search for the Holy Grail. And we all know there is no Holy Grail. What is needed is more than just a “system.” What is needed is you following the system. This leads to stage three.
3. I’m responsible for my success: Stage three comes when the investor or trader realizes that success comes from inside the person, not outside. To achieve true success you must understand the market is not responsible, you are. There is no one to blame or compliment but yourself when it comes to trading. So find a solid plan and follow it.
Most traders get stuck between stage two and stage three. They find a good system but cannot follow it. They override the rules during drawdowns. They exit winners early. They hold losers too long. They know what the system says and choose not to do it because the emotional pressure of the moment is stronger than the intellectual commitment to the plan. That is the discipline problem in its precise form. The system is not the obstacle. The trader’s willingness to follow the system is the obstacle.
Stage three is the arrival point. It is the recognition that the system’s results are a direct reflection of how consistently the trader follows it. No one else is responsible. The market did not fail you. You failed the system by not following it. Once that is accepted, the question stops being “why isn’t this working?” and becomes “how do I follow this more consistently?” That shift in framing is what separates traders who improve from those who perpetually search for a better system to blame their results on.
Trend following demands that you detach emotions from your trading and maintain exacting discipline. Trend following, for example, can be a winning plan, but you must be disciplined to do the hard (and right) thing every day.
The hard thing is cutting a loss when it hits the stop, even when every instinct says wait for the recovery. The hard thing is holding a winning position through a pullback, even when the temptation to lock in the profit is overwhelming. The hard thing is taking the next signal after a losing streak, even when confidence is low. None of these actions require intelligence or special knowledge. They require discipline, applied consistently, every single day. For the specific rules that define exactly what the right thing to do is in every situation, see the TurtleTrader rules. For the full story of how discipline was taught and tested in the original experiment, see the TurtleTrader story.
Frequently Asked Questions
What does Ted Williams have to do with trend following?
Williams divided the strike zone into 77 cells and only swung at pitches in zones where he hit well, refusing to swing at unfavorable pitches even when it meant running the count against him. Trend followers apply the same selectivity: they wait for markets that are moving in a defined direction with sufficient force and refuse to trade when conditions do not meet their criteria. The discipline is in the waiting, not just the swinging.
What is the easy money stage and why do most traders experience it?
The easy money stage is the initial belief that profitable trading is simple and accessible to anyone willing to take action on tips and recommendations. Most traders enter the market through this stage because financial media and brokerage marketing actively promote the idea that good information leads to easy returns. One or two significant losses typically end this stage and force the trader toward looking for a more systematic approach.
Why is finding a plan not enough to succeed?
Because the plan is only as good as the consistency with which it is followed. The second stage trap is the Holy Grail search, moving from plan to plan in search of a perfect system that eliminates the discomfort of losses and drawdowns. No such system exists. What is needed is not a better plan but the discipline to follow a good plan through the periods when following it is most difficult.
What does “success comes from inside the person” mean for traders?
It means the market is not responsible for trading results. The system is not responsible. The broker is not responsible. The trader’s consistent or inconsistent application of the rules is responsible. This recognition is the prerequisite for genuine improvement, because it shifts the question from “what is wrong with the market or the system?” to “how do I execute my plan more consistently?”
What is the hard thing that discipline requires every day?
Cutting losses when the stop is hit rather than waiting for recovery. Holding winners through pullbacks rather than exiting to protect small profits. Taking the next signal after a losing streak rather than abandoning the system. None of these require special intelligence. They require consistent application of rules under emotional pressure, which is the practical definition of trading discipline.
Trend Following Systems
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