Improving Consistency In Trading
This is always one of the biggest challenges to becoming a full time profitable trader.
Almost all traders will have a battle against becoming consistent.
Its something that I definitely struggled with when starting out in my trading journey. I would go through weeks of profitable trades and building my account and then equally go through losing streaks and essentially wiping out my wins. Or simply from one week to the next my trading results would fluctuate like crazy…
This will inevitably have a detrimental effect on your trading results but more importantly it will have a major negative effect on your mentality and well being as you become more and more frustrated with inconsistent trading results.
So today I wanted to sit down and go through this in topic to explain some ways to combat this problem and improve your consistency.
Expectations
Firstly its important to define the goal… what does consistent trading look like FOR YOU?
Because believe it or not, the answer to that question is different for different people. So, are you looking to be consistent over the course of each day? Over the course of each week?… Define a time period that is realistic for you to determine your consistency and make sure it has enough time to measure enough trades to account for wins and losses.
Are you looking to be consistent in terms of profit over this period of time? Or are you looking to be consistent in terms of percentage of trades won and loss?
Secondly its important to know that you WONT win every trade.. so any goal that sets out to do so won’t be realistic and won’t be achievable. Winning 80% of your trades is a VERY consistent win rate percentage.
No Silver Bullet
The honest truth is that there’s no secret formula or special sauce that will turn an inconsistent trader into a consistently profitable one overnight. As with everything it will take gradual steps of improvement but I can share with you some methods and insights to help speed that process up.
Consistent Results Come From Consistent Processes
The main reason behind inconsistent results is that traders are using an inconsistent process for each trade they place. If one trade is placed based on one strategy and then you are not using that same strategy on the next trade then you can expect any trading results will reflect that. Its important to understand your strategy in trading intimately… you should have the confidence in your strategy that if you were to lose a trade, you are confident that over time your strategy will work out. Typically this scattergun approach where traders jump from one strategy to the next is the main cause of why their results are inconsistent.
Review Your Strategy
Finally you must of course have a very robust strategy to use in the first place… if the strategy you are using isn’t robust and doesn’t provide an ‘edge’ on the market… if you haven’t done the research and backtesting necessary to know your edge on the market then you can be sure that any result from using that strategy will be inconsistent.
Almost all traders will have a battle against becoming consistent.
Its something that I definitely struggled with when starting out in my trading journey. I would go through weeks of profitable trades and building my account and then equally go through losing streaks and essentially wiping out my wins. Or simply from one week to the next my trading results would fluctuate like crazy…
This will inevitably have a detrimental effect on your trading results but more importantly it will have a major negative effect on your mentality and well being as you become more and more frustrated with inconsistent trading results.
So today I wanted to sit down and go through this in topic to explain some ways to combat this problem and improve your consistency.
Expectations
Firstly its important to define the goal… what does consistent trading look like FOR YOU?
Because believe it or not, the answer to that question is different for different people. So, are you looking to be consistent over the course of each day? Over the course of each week?… Define a time period that is realistic for you to determine your consistency and make sure it has enough time to measure enough trades to account for wins and losses.
Are you looking to be consistent in terms of profit over this period of time? Or are you looking to be consistent in terms of percentage of trades won and loss?
Secondly its important to know that you WONT win every trade.. so any goal that sets out to do so won’t be realistic and won’t be achievable. Winning 80% of your trades is a VERY consistent win rate percentage.
No Silver Bullet
The honest truth is that there’s no secret formula or special sauce that will turn an inconsistent trader into a consistently profitable one overnight. As with everything it will take gradual steps of improvement but I can share with you some methods and insights to help speed that process up.
Consistent Results Come From Consistent Processes
The main reason behind inconsistent results is that traders are using an inconsistent process for each trade they place. If one trade is placed based on one strategy and then you are not using that same strategy on the next trade then you can expect any trading results will reflect that. Its important to understand your strategy in trading intimately… you should have the confidence in your strategy that if you were to lose a trade, you are confident that over time your strategy will work out. Typically this scattergun approach where traders jump from one strategy to the next is the main cause of why their results are inconsistent.
Review Your Strategy
Finally you must of course have a very robust strategy to use in the first place… if the strategy you are using isn’t robust and doesn’t provide an ‘edge’ on the market… if you haven’t done the research and backtesting necessary to know your edge on the market then you can be sure that any result from using that strategy will be inconsistent.
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