Achieving consistency in trading is well worth the effort it takes to get there.
Imagine, for example, that you can make 20% a year on your trading. Here is what happens when you compound that over 20 years.
You don’t need huge gains to be a success financially, just consistent ones.
So, what stops people from achieving consistency?
Here are a few key things.
Failure to understand the system development process
Most traders expect their trading systems to be profitable from day one, and if it’s not they are quick to discard them.
But good systems are built over time in the fire of battle.
Refining your system via live trading eventually gets you to the point of consistency. You won’t get there through theory or demo trading, nor will you get there in your first month, or even year.
What you need to do is pick your best idea for making money in the markets and stick with it. When you are not successful from day one, don’t stress. Keep trading, keep recording your results, and keep working hard on improving your system. If you eliminate mistakes, add ways to cut your losses better, and let your profits run more, your system will get there.
Not having clear goals… and a position sizing model to match
Many traders go into the markets without being clear on what they are trying to achieve.
To be consistent, you need to know what you are working towards. The first step to consistency is knowing how much you are trying to make (say 20% a year) and what sort of drawdown you are willing to experience (say 10% a year).
Once you have worked out those numbers, then you need to work out how much to trade each time you press the buttons in order to achieve those objectives.
Otherwise, you will end up trading the wrong size and your returns won’t match your goals.
Lack of effort
Trading is hard work there is no way around it.
You need to do much more than look at charts, place trades and read news (the fun stuff). You need to prepare yourself mentally for your trading, you need to be diligent in recording your results, and you need to have a detailed trading business plan.
Working hard in the markets means doing the hard work, not spending lots of time doing the things you like.
If you want to achieve consistency, you need to be committed to it. There is no way around it.
Want to become more consistent?
If you want to become more consistent in your trading, check out my short course that covers 4 (different) keys to consistent trading.
Or perhaps you want to check out my new book:
About the Author
Sam Eder is a currency trader and author of The Consistent Trader and the Advanced Forex Course for Smart Traders (get free access). He is the owner of www.fxrenew.com a provider of Forex signals from ex-bank and industry traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter or get FREE access to his acclaimed How to Be a More Consistent Trader Short Course.