Finding Consistency

The 5th stage in a trader’s learning cycle is consistency. Let’s talk about how to be consistent when it comes to your trading. At times…when you encounter a series of losing trades you might need help to stay focused and confident in your trading strategy and trading plan. 

A lot of traders begin to have doubts and second thoughts…does my strategy really work? You start to have thoughts…should I stick with this plan? All these thoughts and more start to creep into your head and most begin to wander. This cycle keeps repeating time and time again.

Many traders find themselves on an endless path to try to find that perfect system or strategy, which I can tell you with CERTAINTY…doesn’t exist. But the search goes on for many, until they eventually give up or come to the same realization, that the perfect strategy or method doesn’t exist.

So, how can a trader protect themselves from falling prey to this destructive cycle?

Well, there are two things that can certainly help and that is backtesting your trading plan and tracking ALL your trades. How does this help? When you backtest your strategy and track your trades you will become intimate with all the details of your trading method and corresponding metrics. You will come to know important details such as;

  • Win percentage
  • Trade profit
  • Maximum drawdown
  • Consecutive wins vs losses
  • Your “R” factor (Profit factor)
  • Your best setups and patterns 
  • Your best trading days and times

There are many more metrics that you will find in this process. I personally track these metrics and review them each and every week and month. By knowing these numbers you will trade more confidently knowing that a few losing trades in a row….or a larger avg loss are within the statistical norm for the strategy. Or maybe the numbers are not working out and then you would know that you need to tweak a certain piece to get everything on track. 

But in essence, the point is you will have mathematical data, from which to analyze your trades and prevent yourself from making decisions about the integrity of your method based solely on your mood…or the last few trades.

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Live Trade Room Disclosure: This presentation is for educational purposes only and the opinions expressed are those of the presenter only. All trades presented should be considered hypothetical and should not be expected to be replicated in a live trading account

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