Consistency Is The Real Holy Grail Of Trading

You have to have principles in place. I love principles as they allow you at apply general laws to specific examples you see in the market. The principles you obtain through trial and error and experience give you the framework to execute well thought out trades that have the best chance of success and if they don’t you can analyse and grow and develop for the next time you see that particular setup. There are fundamental laws on how you would like things to work out. They provide the overarching principle you live your trading life by. And these will start to bring success as they are developed from your beliefs which will drive your long term behaviour of success.

These principles do drill down to specific rules within trading. They come from learning, obvious rules like do not chase a trade or always trade with a stop loss, to rules you develop over time say on a mistakes sheet that you add to over time. But they are all created out of your principles to regulate the correct conduct when trading. All aspects are important but rules cannot be broken as breaking rules will lead to losses, because you now know that these are in place to keep you safe, from wild market moves, and more importantly yourself. The rules you adopt will be the guides to make consistent results. But you need to be committed to not breaking them or trading outside of your trading plan.

This leads on to the next factor of control. It is not easy to control your behaviour when you are sat at the computer on your own. You must have control because you can be drawn into the world of gambling. Trading is exciting, the movements, the money you are making, the banter on forums or the squawk you have in your ear. But if you feel excited about individual trades you are in the wrong trade. It is acceptable to get enjoyment out of trading. Trading should make you a happy person but that is because you are excited about closing the trade when you have been in complete control of all your principles, rules and have closed for a profit. Getting excited if your analysis has worked even if your trade failed, sounds unintuitive, however, if you have followed all your principles and rules then you are beginning to act like a professional trader. And a professional trader is always prepared to accept a loss as long as it falls within the parameters of their rules of risk/money management because then they can survive to trade another day and know next time it has a chance to succeed.  Control gives you the sense of calm and the knowledge that you are doing everything right to give yourself the best chance to make consistent wins and accumulate those pips so you can fulfil your dreams of financial freedom.

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Simon Cotterill 2 years ago Author's comment

Thanks Barry. I'll write more and hopefully will continue to help.

Barry Hochhauser 2 years ago Member's comment

Enjoyed this, thanks.