Easily, the #1 question received from traders is How can I be a more consistent trader?
Consistency is the thing on the minds of traders more than anything else about trading. Yeah… even more than profits.
Why? Because traders have seen profits. They aren’t unaware of what it’s like to win. They are, however, often unaware of what it’s like to see consistent winning. Not winning 100% of the time. But winning most of the time.
I will provide a meaningful answer to this question for you soon. But, I need you to be open to accepting the hard truth that it may not be the answer you want.
If the answer isn’t what you want, but it helps your trading, would that be worth it? Yeah, I think so too.
First, let’s make sure we agree on what “consistent” means.
Traders long for, more than anything, the end result to be more consistent.
But, for some strange reason, they don’t want to be a more consistent person. And they struggle to consistently execute trades that they know have an edge.
The desire to have this trade win makes closing small winners attractive — when the edge calls for holding it longer and, yes, maybe letting it turn into a loser.
The desire to be right instead of wrong fuels your creativity to find reasons to hold losers too long — when the edge calls for closing the loser now.
Does this next one sound familiar?
“If the trade can just get back to even, I can call this one a scratch”
Who cares what you “call” it. It’s now a bad trade with No edge and you are being an inconsistent trader who will only have inconsistent results.
Do you want more consistent results? Then get over the desire to have quick wins and get over the need to be right. These are leftover ideas from grade school when it mattered how many of your test answers were right.
This is trading, not high school. You can be wrong on 50% of your trades and win 80% of your days, weeks, and months.
Ok, are you ready for some practical ways to become a more consistently profitable trader? Here are three steps.
- Know you have an edge. I don’t mean know in your gut or in your heart. I mean that you need to have dozens if not hundreds of examples that show you it works. Not “it worked last time” or, “this guy on TV said”. Do your own work and know the stats.
- Do whatever you need to do to follow the edge without one iota of deviation. Too many times, traders think something is wrong or something is different and abandon an edge when it wasn’t broken. Identify a valid reason to abandon ship. Something more substantial than feeling less excited than you did when you started. Here’s one for example of a valid reason: If you know the maximum drawdown of an idea historically (ref. #1 “know the stats”), then you have no real reason to abandon, or even modify the idea until that drawdown is surpassed.
- Keep your ideas simple and diversify. Just like trades that aren’t going the right way, traders can get too focused on trying to hold onto ideas that may not be working anymore. Accept — ahead of time — that every strategy may work for a while and then stop. Distance your ego from the strategy. Let the strategy go so you don’t get pulled down with it.
We’re here to help you. Hey, we still battle these issues from time to time. We believe that we are better off together and we’d love to have you join us on the path to improving your trading.
Send me an email to learn about our education, group mentoring, personalized training, or learn how to get seed capital to trade strategies in a funded account without putting your own capital at risk.
I look forward to hearing from you!