We can talk a lot about consistency in trading from risk management to trade entry. Consistency is important because without it, not only will your trading success be sporadic but it’s impossible to fine tune areas where you are making mistakes.
Some may say that being consistent with the right thing is the missing link between a starting something new and finding success with it.
But humans have an issue with being consistent. In fact, being consistent is probably second only to not taking any action that explains why success in virtually anything eludes the majority of people.
It will be difficult for anyone to argue that consistency with the trading plan for your trading strategy is a vital cog in the wheel of success. You could say that consistency is the overriding “must” in the three legs of trading:
- Trading method
- Risk management
Trading seems to bring out the best – and worst – in people and you can quickly find where you are lacking as a person.
As an example, if you have a trading method but are not consistent in your approach, the odds are that there are others things in your life where you lack consistency as well. Trading can often be described as holding a mirror up to yourself and seeing everything about yourself, warts and all.
Distracted By The Latest And Greatest
As if being consistent with all the variables that make up your trading system was not enough, there’s an even greater threat lurking:
Consistency With Your Choice Of Trading Method
In trading, this is where many lack. They are so interested in a myriad of ways to trade that they never just zone into one long enough to have sufficient chart time with it. I know this to be true because I talk to people just like that.
I know someone who is trying to be consistent with a momentum approach to trading. While he does the chart time, it is not laser focused. When waiting for momentum, he tries to play ranges and ends up getting bit. When the momentum move is showing its hand, he gets in too late or exits too early. The dedicated focus to one style is not present.
Do you think this person will ever be proficient at any approach that is being used?
The odds are no.
It would be a different situation if the trading systems did not have a positive expectancy over time. Anybody would be forgiven if they packed up a trading system that showed no proven edge in the market.
You’d be a fool not to.
But what if the trading system does show an edge?
Is it not worth your full attention to implementing the trading plan that takes advantage of that edge? It certainly is!
“I fear not the man who has practiced 10000 kicks once”.
That was Bruce Lee and it is clear that he understood the power of laser focus and consistency on one thing. He understood that light bulb focus would never make anybody great at any one thing.
Those people were not to be feared.
He did say “but I fear the man who has practiced one kick 10000 times.”.
Lee feared the focused and dedicated person who laser focused attention on one skill.
Can you imagine the neural pathways that are created when you practice one thing 10000 times?! Immense. I am sure execution becomes a reflex when the appropriate stimuli is present.
Jason Shen over at Lifehacker wrote: “At first, the new skill might feel stiff and awkward. But as we practice, it gets smoother and feels more natural and comfortable. What practice is actually doing is helping the brain optimize for this set of coordinated activities, through a process called myelination.
See where we are going with this?
Far too many traders who state that success is important to them do everything to ensure the opposite. System jumping, not following trade plans and discarding risk parameters leads them to ruin.
They have not specialized in anything.
The next time they read a forum and receive a trading email, be assured their attention will be diverted from their current path.
Be Clear On Your Goals
One exercise that may help some with being consistent is to be crystal clear on what they want from their trading. What happens if that goal is not reached?
Really brainstorm on why you want to trade.
- To make additional money to support my family
- To make trading a stand alone business
- To ensure your retirement will not be like the 10% of seniors who retire in poverty
What will happen if you your goals are not met? Really dig into the ugly here:
- Continue to live paycheck to paycheck
- Work too many hours which does not enable quality family time
- Need to depend on the government to support you in the later years
Of course, you want to commit to a trading method that actually has an edge. Knowing you are using something that can help you attain your goals will most likely enable you to stick to what makes it successful in the first place.
Commit To A Trading System
Pick one. Pick one method to trade. One way to enter a trade. One way to manage a trade. One risk profile. One way to exit.
Hopefully this is all contained in a trade plan for one method. If it isn’t, write one out.
Perhaps it is a pullback strategy. Maybe a break-out strategy. Perhaps it uses moving averages and an oscillator. It doesn’t matter what the strategy is as long as the testing has shown a positive expectancy over time.
Let’s build a habit of laser focus on one of many styles of trading. Let’s begin the task of making your trading a reflex that occurs when a certain variable exists.
Not before the trading has set up.
Not after the trade has already triggered and you just watch it go.
During the process of the edge showing itself in the current trade setup
What trading system should you use?
Netpicks has been in the business of designing, testing and trading positive expectancy trading systems for over 2 decades. Whether your interest is in Options, Futures, Forex, swing or day trading, Netpicks is in a position to be able to help you define your needs and present viable trading systems to suit your goals.
There are a few ways you can get started:
- Take a free trial in our trade room so you can see our trading systems at work in the markets of today. Ask questions and get answers.
- Jump into our Inner Circle where you can try out every system we have and even learn about the opportunities in other markets
- Get in touch with our support team with questions and see if they can get you off on the right foot.
Whatever you decide to do: Do not ignore the opportunity that trading offers those who are consistent with the right things.
Your goals may not be as out of reach as you may think.