Trading Discipline

Have a trading plan or system is essential to the exercise of good discipline, as it normally imposes certain parameters and sets out certain criteria which dictate how trading decisions should me made and what needs to be done in certain situations. Habitually following your plan is what is meant by the exercise of good trading discipline, which, in turn, will help you realize the best expected results possible from your plan. If you find that your trading plan or system is not meeting your expectations, despite habitually following it for a reasonable period of time, good discipline requires that you be prepared to review it and make any adjustments or fine tuning necessary for future use

Lack of Discipline
Day traders who suffer from lack of discipline often allow their emotions to rule their trading decisions, which often leads to bad decisions and unacceptable trading losses. Never allow your emotions to rule your trading. In order to trade successfully, you must develop a trading plan.

Many inexperienced traders demonstrate lack of discipline by being afraid or reluctant to take losses and to get out of a stock when it goes down, in the often vain hope that the share price will rise again. Often, however, the share price tumbles even lower, and the trader's initial small loss in the trade becomes a large one. Likewise, some day traders often get greedy if the share price rises and are reluctant to take profits off the table when their trading plan or system suggests they should. They think the share price will rise even more, and they can make even more profits. However, the share price may subsequently drop, causing their gains to dwindle or become losses. Fear or greed are two emotions that should play no role in the life of a disciplined day trader.

What It All Means
In short, discipline requires that you: Trade on the basis of trading plan or system and not on the basis of your hunches or emotions. Take a profit when you're supposed to in accordance with your pre-determined plan. Take a loss when you're supposed to in accordance with your pre-determined plan. Don't trade when there's no need to.

Cabinet approves sixth pay panel, bonanza for babus

GOVERNMENT ON Thursday (August 14) approved the Sixth Pay Panel hike for the civil servants, armed forces employees and paramilitary personnel. It announced a 20 per cent hike, much to the joy of the expecting bureaucrats and a big hike that has been proposed for the armed forces as well.

These recommendation will benefit 55 lakh employees of the government of India.

There is 25 to 30 per cent hike in the salary of Central government employees. The employees will be paid arrears in cash and recommendations will be effective from January 2006, a meeting of the Union cabinet decided on Thursday.

The pay hike will be paid in two installments with 40 per cent paid this year and rest to be paid next year.

On Wednesday (August 12), the Prime Minister chaired a meeting, in which top government functionaries met and discussed the recommendations of the Pay Commission report and those made by the empowered committee of secretaries.

The Pay Commission had recommended an increase of 1.74 per cent in salary to the armed forces, based on inflation data but it is likely that it will come to 1.83 times after revision.

Sixth Pay Commission approved by Government

The United Progressive Alliance government on Thursday approved the Sixth Pay Commission recommendations, heaping civil and defence staff with a salary hike bonanza on the eve of the country's 61st Independence Day.

According to Information and Broadcast Minister Priya Ranjan Dasmunshi, the revised pay scales will take effect from January 1, 2006. He added that arrears will be paid in two installments, 40 per cent this fiscal and 60 per cent in the next financial year.

Approving the recommendations with slight modification, Dasmunsi said that the new system includes four pay bands and the mid-level officers have been placed in the highest pay band. The minimum entry level pay has been raised to Rs 7,000 from Rs 6,660 per month recommended by the Commission. The minister also added that special allowances will be provided to Army commandoes and their Naval and Air Force equivalents.

The Sixth Pay Commission, headed by Justice B N Srikrishna, had in March submitted its report to the government, recommending an average 28 per cent hike for central government staff and defence personnel.

Prime Minister Manmohan Singh on Wednesday held a meeting with External Affairs Minister Pranab Mukherjee, Defence Minister A K Antony and Finance Minister P Chidambaram to discuss the pay commission report and the recommendations of the empowered committee of Secretaries that went into it.

The pay round comes roughly once a decade and the previous one in 1997 raised salaries for federal employees by nearly 40 per cent, prompting many state governments to follow suit and blowing the combined state and federal deficit to nearly 10 per cent of GDP.

Drowned in Credit Card bill

Uncontrolled credit card debt is a common worry for many people. It's so easy to say "charge it", but once the monthly statements start arriving, the excitement of the initial purchase is usually gone. Now you are faced with the dilemma of how you're going to pay for it.


Some people exercise discipline and pay their credit card statement in full each month. Others pay whatever they can afford, in addition to the minimum payment. The majority of people pay only the minimum amount due each month on their debt.

Are you guilty of only making the minimum payment on your credit cards? If you are, the lending institutions will love you. This is because they make money on the interest that they charge. The longer it takes for you to pay off your debt, the more money they make in interest.

The first place to start controlling your credit card debt is to make sure that you are getting the lowest interest rate on your charge account. If it is inevitable that you will carry a balance on your charge card, you don't want finance charges eating your lunch. Check out the various low interest rate credit cards to compare rates before selecting a credit card.

If you are just starting to establish your credit, prevention is the best way to protect yourself from too much debt. If you are tempted to whip out your card to make some impulsive purchase, ask yourself, "If I had to write a check for this item, would I still want to buy it?" If the answer is no, then don't use your credit card to buy it.

If you have an emergency come up (like your refrigerator dying or your transmission going out), you may have to incur a little credit card debt. Use the credit card with the best interest rate, and vow to pay it off as soon as possible.

Once that monthly statement comes in, pay as much over the minimum payment as you can. You can probably find ways to save money (like taking your lunch to work) to add to your minimum payment, and thus pay off your credit card much faster. If you're drowning in credit card debt, it can help to start learning how to manage your debt wisely.

Ways to pay down credit card debt:

Use Money In Low Interest Savings Accounts - If you have money sitting in a savings account or CD that is earning you very little interest, use some of this to pay down your credit card debt. Be sure to have a little set back to cover emergencies instead of using your credit card.

Paying Off The Highest Balance First - Work on paying off the highest interest rate credit card debt first. Determine a set amount (above and beyond the minimum payment) that you can afford to make. Apply this set amount towards the balance until it is paid off. Once that credit card is taken care of, add the set amount that you were paying to the credit card with the next highest interest payment. By continuing to add the payment amounts to the next bill, the total amount that you pay out on credit card debt each month doesn't vary. You also pay down subsequent credit card debt much faster.

Paying Off Lowest Balances First - Another approach to paying down your credit card debt is to pay off the lowest balances first using the same principle as above. Some people prefer this method because they can see progress much faster. The only drawback is that you will end up paying more interest over the long run.

Credit Card Debt Consolidation - You can also consider credit consolidation to help pay down your debt. Consolidation generally reduces the total amount paid out each month, and may also reduce how long you will be in debt. Remember that if you choose a consolidation loan, you should close out all but one credit card account. Use your remaining credit card for emergencies only. If you have to use it, pay the balance in full when your statement arrives. The idea is to get out of debt, not to free up your credit so that you can get yourself in more financial trouble.

Credit Card Transfers - Another method some people utilize to pay down credit card debt is by using credit card transfers. This can be accomplished by taking advantage of low introductory offers on balance transfers to consolidate all your balances. Before the introductory rate expires, you then qualify for another low introductory rate balance transfer. Close out the old account, pay on your new one, and shop for the next offer in which to transfer your balance. If you use this method, realize that your credit file will show this numerous activity. Also read the agreement terms of each credit account very carefully to insure that you don't incur any early closure fees.

Debt Mediation - You can also get a handle on credit card debt by enlisting the help of a debt mediation company. Debt mediation can help people in becoming debt-free in approximately 24-36 months, with the final settlement on consumer accounts being paid off with as little as forty cents on the dollar. Consumers considering mediation need to realize that initially their credit rating will suffer, but will build up eventually as the debts are paid off and reported as "paid in full" by the various customers at the end of the program.

The best way to control credit card debt is to not get yourself in trouble in the first place. Use your cards for convenience in traveling, making reservations, or for emergencies. If you would hesitate to pay cash for a purchase, then you should hesitate to use your credit card. When in doubt, don't say "charge it".