Achieving consistency: simple steps every trader can take surprisingly !
Achieving consistent results is the largest challenge any trader faces on the road to becoming professional grade. Consistency in this context is not measured by profits, because even when a trader does everything according to plan, he might still lose money.
Consistency is measured by how traders conduct their business, control their emotions, and manage their accounts. Is your trading organized and efficiently executed, or do you change strategies every week, hoping you have found a better mouse trap? Having nearly finished this book, you now understand how I trade the currency market, but whether you’ll be able to do anything with this knowledge is up to you.
Even if I published the Holy Grail of trading strategies in every major newspaper across the United States, there would be plenty of traders who would still go broke. Every trader goes through a personal journey to achieve consistency; this journey has less to do with skill and everything to with the trader’s personality and state of mind.
In this chapter you will read about several common problems I see among traders who e-mail me for help. You will learn how to organize your trading by writing a trading plan and keeping a trade journal. I’ll share some advice that has worked well in my own trading, and finally, you will learn how to demo trade correctly.
Traders waste a tremendous amount of time searching for the one system that will turn them into a confident and successful trader. The pursuit for the Holy Grail of trading is not only futile, it damages a trader’s confidence in her ability to trade her own style. When you are constantly searching for a better, easier trading system, you are not spending time with the live market and you’ll eventually lose confidence in your own ability to select a good trade.
The less time you spend on Internet forums, chat rooms, or getting trading tips off Twitter, the better. Stop looking for the Holy Grail; it doesn’t exist, and no number of indicators, gurus, or web sites is going to make you a better trader. You have everything you need in this book, and now it is time to do it on your own. If you spend another week searching for another trading system, you’re using it as an excuse to avoid doing what you already know works. It’s like buying yet another diet book to lose weight when you already know you should eat less and exercise.
These traders are not alone. I struggled with trading strategies for several years. I finally had to accept that trading was a game of probabilities, and no matter how hard I worked, losses were going to happen. The notion that I couldn’t eliminate all the inefficiencies in my trading strategies was very alien to me. I had come to trading from a lengthy career in e-commerce and software engineering, so coding out bugs was a part of my nature.
I wasted a lot of time trying to perfect various trading systems until I ditched them all and simply focused on support and resistance.You do not need a perfect trading system to make a decent return in the trading business.
Achieving a consistent result has more to do with a lack of discipline in a trader’s life than anything else. Trading is such an individual journey that it has a keen ability to lay bare any emotional or discipline problems a trader has in his personal life. I believe that learning to trade is closer to learning how to lose weight or play an instrument.
Each is well documented, and anyone can learn to lose weight or play an instrument, but the ability to do so lies in the individual’s resolve to commit to the process. There are no quick and easy roads to losing weight or playing a bass guitar, and there are no quick and easy roads to becoming a successful trader. Is it any wonder, then, why weight loss ads and currency trading infomercials offer quick rewards with little effort?
Fixing yourself first is a critical first step to achieving a consistent result as a trader. The topics in this section may be uncomfortable for some of you to read because you’ll realize you are in this situation, but do not worry; you can overcome these issues and become a great trader. Finally, don’t skip this section because you think you have it all figured out. You might identify trouble spots you didn’t even realize you had, and your results could show it.
It should be obvious to point out that a trader should be financially stable before he begins trading, but I continue to meet traders who are literally down to their last $500 and are trying to trade their way out of a jam. This kind of desperate trading is typically not sustainable, and many of them I meet ultimately fail under the pressure. I suspect a number of traders in this situation are drawn to trading in part due to the low barrier of entry offered by micro accounts and the constant marketing of get-rich-quick trading schemes.
Trading is not a road to easy wealth, and you shouldn’t be trading if you are struggling to keep the lights on or food in your house. I’m not suggesting you can’t trade if you only have $1,000, but trading is a serious business that requires financial stability going into the venture. If you lose that $1,000, it shouldn’t bankrupt you.
Stress can lead to poor decision making, and there is already enough pressure to achieve consistency without worrying about having to pay your bills with the next trade. If you are not where you need to be financially, I suggest you seriously demo trade until you are on better financial ground. You’ll be much better prepared to trade with live money after a few months of practice and much calmer about taking trades, knowing that your risk capital doesn’t represent what’s left of your life savings.
I’ve found trading to be the most rewarding, exciting, personally demanding, and emotionally draining profession I’ve ever pursued. When I came to trading I had already established myself as a leader in the highly technical field of e-commerce and information technology management. What I did for a living was hard, complex, and demanding, so I figured trading would be a breeze to master.
I was wrong. What many traders do not realize about trading is how demanding it will be on their personal emotions. I liken learning to trade to learning to lose weight. Just like a dieter, each trader has a unique set of emotions, personal barriers, fears, and insecurities he must identify and move beyond in order to achieve success. Just like losing weight, trading is a personal journey, and each trader will achieve success only when he is ready to cut loose his personal anchors.
You should be prepared for a journey in personal development when you begin to trade.
If you are an analytical thinker, someone who likes structure, logic, and predictable outcomes, you may have a personality that will become easily frustrated with trading. I’m an analytical thinker; I was a programmer for years and have flown airplanes since I was 13. I’ve always believed that with hard work and logical thinking any problem could be solved, which is not the case in trading.
I found myself trying to optimize every trading system I developed to the point where I determined the trading system to be flawed and proceeded to look for a better one. I grew increasingly frustrated that I couldn’t apply logic and remove all the faults from each trading system. It actually hindered my trading for a long time because I spent more time trying to build a system rather than actually trading.
I finally had to accept the fact that trading is an abstract world, void of clean, logical assumptions and to simply start trading with an imperfect system. For a binary guy like me, that was very hard to do. The market is an abstract beast, and you can’t develop the perfect system. If you’re an analytical personality type, be aware of the desire to over optimize a system because it might an issue for you.
You should be ready to accept that the market isn’t perfect and no trading system will be, either. You can’t optimize every loss out of a trading system, and that is okay. Just start trading!
Workaholics and “Type-A” Personalities Most people in this world are content with coming to work and doing their 40 hours a week in exchange for a stable paycheck. These are not the kind of people I meet who are interested in trading. People who are driven, who want to better their lives and achieve true financial and personal freedom, are the types I see every day through my blog and online webinars.
Most of these people are already successful corporate warriors and now they are looking to ditch a day job they hate, and supplement their investments. Others are approaching retirement and realize they need to do something to maintain their current lifestyle into retirement.
These people are driven, success oriented, and willing to put in the effort necessary to become successful traders. The problem is, trading doesn’t necessarily reward constant effort, and that can be a problem for driven folks.
Workaholics and “Type-A” personalities need to have something to do every day or else they do not feel they are doing enough to reach their goals. Perhaps this is why such people are attracted to day trading. Unfortunately, just because you want to trade today doesn’t mean the market is offering any opportunities.
The currency market will move when it is ready, and people who can’t contain their desire to trade in order to “be a trader” will place their capital needlessly at risk. Driven personality types are at risk of developing a habit known as over trading. Over trading occurs whenever a trader takes a trade simply because she is bored or feels the need to be trading to justify her existence as a trader.
Listen, the market doesn’t care if you spend one hour or 10 hours a day looking at charts. I’ve met traders who spend 12 hours a day trading and still haven’t made a profit. You must learn to let go, allow the market do the work for you, and trade only when it is necessary. You can’t force success just by putting in more hours watching the charts. Think about the old saying, “A watched pot never boils,” and learn to relax a bit.
If struggling traders were trying to lose weight, the outcome would be very similar. There is no secret formula to achieve success at trading. It takes good money management and the discipline to do the same thing every day. Is it any surprise that diet pills and currency trading systems are advertised the same way?
People respond to promises that a pill or a black-box trading system will fix all their problems. If you have problems with discipline in your life, this will probably be the largest struggle ahead of you on the road to becoming a successful trader. Discipline issues are subtle, and even people who seem to have it together could be a mess under closer examination.
Consistency is measured by how traders conduct their business, control their emotions, and manage their accounts. Is your trading organized and efficiently executed, or do you change strategies every week, hoping you have found a better mouse trap? Having nearly finished this book, you now understand how I trade the currency market, but whether you’ll be able to do anything with this knowledge is up to you.
Even if I published the Holy Grail of trading strategies in every major newspaper across the United States, there would be plenty of traders who would still go broke. Every trader goes through a personal journey to achieve consistency; this journey has less to do with skill and everything to with the trader’s personality and state of mind.
In this chapter you will read about several common problems I see among traders who e-mail me for help. You will learn how to organize your trading by writing a trading plan and keeping a trade journal. I’ll share some advice that has worked well in my own trading, and finally, you will learn how to demo trade correctly.
STOP SEARCHING FOR THE HOLY GRAIL
Traders waste a tremendous amount of time searching for the one system that will turn them into a confident and successful trader. The pursuit for the Holy Grail of trading is not only futile, it damages a trader’s confidence in her ability to trade her own style. When you are constantly searching for a better, easier trading system, you are not spending time with the live market and you’ll eventually lose confidence in your own ability to select a good trade.
The less time you spend on Internet forums, chat rooms, or getting trading tips off Twitter, the better. Stop looking for the Holy Grail; it doesn’t exist, and no number of indicators, gurus, or web sites is going to make you a better trader. You have everything you need in this book, and now it is time to do it on your own. If you spend another week searching for another trading system, you’re using it as an excuse to avoid doing what you already know works. It’s like buying yet another diet book to lose weight when you already know you should eat less and exercise.
These traders are not alone. I struggled with trading strategies for several years. I finally had to accept that trading was a game of probabilities, and no matter how hard I worked, losses were going to happen. The notion that I couldn’t eliminate all the inefficiencies in my trading strategies was very alien to me. I had come to trading from a lengthy career in e-commerce and software engineering, so coding out bugs was a part of my nature.
I wasted a lot of time trying to perfect various trading systems until I ditched them all and simply focused on support and resistance.You do not need a perfect trading system to make a decent return in the trading business.
FIX YOURSELF FIRST
Achieving a consistent result has more to do with a lack of discipline in a trader’s life than anything else. Trading is such an individual journey that it has a keen ability to lay bare any emotional or discipline problems a trader has in his personal life. I believe that learning to trade is closer to learning how to lose weight or play an instrument.
Each is well documented, and anyone can learn to lose weight or play an instrument, but the ability to do so lies in the individual’s resolve to commit to the process. There are no quick and easy roads to losing weight or playing a bass guitar, and there are no quick and easy roads to becoming a successful trader. Is it any wonder, then, why weight loss ads and currency trading infomercials offer quick rewards with little effort?
Fixing yourself first is a critical first step to achieving a consistent result as a trader. The topics in this section may be uncomfortable for some of you to read because you’ll realize you are in this situation, but do not worry; you can overcome these issues and become a great trader. Finally, don’t skip this section because you think you have it all figured out. You might identify trouble spots you didn’t even realize you had, and your results could show it.
BE FINANCIALLY STABLE
Regardless of how well you protect your account the money in your trading account is called risk capital for a reason. Trading currency off exchange, on margin, is probably the riskiest trading environment in which a trader can participate. Traders can and have lost their entire accounts through stupid trades, poor risk management, or both.
It should be obvious to point out that a trader should be financially stable before he begins trading, but I continue to meet traders who are literally down to their last $500 and are trying to trade their way out of a jam. This kind of desperate trading is typically not sustainable, and many of them I meet ultimately fail under the pressure. I suspect a number of traders in this situation are drawn to trading in part due to the low barrier of entry offered by micro accounts and the constant marketing of get-rich-quick trading schemes.
Trading is not a road to easy wealth, and you shouldn’t be trading if you are struggling to keep the lights on or food in your house. I’m not suggesting you can’t trade if you only have $1,000, but trading is a serious business that requires financial stability going into the venture. If you lose that $1,000, it shouldn’t bankrupt you.
Stress can lead to poor decision making, and there is already enough pressure to achieve consistency without worrying about having to pay your bills with the next trade. If you are not where you need to be financially, I suggest you seriously demo trade until you are on better financial ground. You’ll be much better prepared to trade with live money after a few months of practice and much calmer about taking trades, knowing that your risk capital doesn’t represent what’s left of your life savings.
PERSONALITY TRAITS AND TRADING
I was wrong. What many traders do not realize about trading is how demanding it will be on their personal emotions. I liken learning to trade to learning to lose weight. Just like a dieter, each trader has a unique set of emotions, personal barriers, fears, and insecurities he must identify and move beyond in order to achieve success. Just like losing weight, trading is a personal journey, and each trader will achieve success only when he is ready to cut loose his personal anchors.
You should be prepared for a journey in personal development when you begin to trade.
ANALYTICAL THINKERS
If you are an analytical thinker, someone who likes structure, logic, and predictable outcomes, you may have a personality that will become easily frustrated with trading. I’m an analytical thinker; I was a programmer for years and have flown airplanes since I was 13. I’ve always believed that with hard work and logical thinking any problem could be solved, which is not the case in trading.
I found myself trying to optimize every trading system I developed to the point where I determined the trading system to be flawed and proceeded to look for a better one. I grew increasingly frustrated that I couldn’t apply logic and remove all the faults from each trading system. It actually hindered my trading for a long time because I spent more time trying to build a system rather than actually trading.
I finally had to accept the fact that trading is an abstract world, void of clean, logical assumptions and to simply start trading with an imperfect system. For a binary guy like me, that was very hard to do. The market is an abstract beast, and you can’t develop the perfect system. If you’re an analytical personality type, be aware of the desire to over optimize a system because it might an issue for you.
You should be ready to accept that the market isn’t perfect and no trading system will be, either. You can’t optimize every loss out of a trading system, and that is okay. Just start trading!
Workaholics and “Type-A” Personalities Most people in this world are content with coming to work and doing their 40 hours a week in exchange for a stable paycheck. These are not the kind of people I meet who are interested in trading. People who are driven, who want to better their lives and achieve true financial and personal freedom, are the types I see every day through my blog and online webinars.
Most of these people are already successful corporate warriors and now they are looking to ditch a day job they hate, and supplement their investments. Others are approaching retirement and realize they need to do something to maintain their current lifestyle into retirement.
These people are driven, success oriented, and willing to put in the effort necessary to become successful traders. The problem is, trading doesn’t necessarily reward constant effort, and that can be a problem for driven folks.
Workaholics and “Type-A” personalities need to have something to do every day or else they do not feel they are doing enough to reach their goals. Perhaps this is why such people are attracted to day trading. Unfortunately, just because you want to trade today doesn’t mean the market is offering any opportunities.
The currency market will move when it is ready, and people who can’t contain their desire to trade in order to “be a trader” will place their capital needlessly at risk. Driven personality types are at risk of developing a habit known as over trading. Over trading occurs whenever a trader takes a trade simply because she is bored or feels the need to be trading to justify her existence as a trader.
Listen, the market doesn’t care if you spend one hour or 10 hours a day looking at charts. I’ve met traders who spend 12 hours a day trading and still haven’t made a profit. You must learn to let go, allow the market do the work for you, and trade only when it is necessary. You can’t force success just by putting in more hours watching the charts. Think about the old saying, “A watched pot never boils,” and learn to relax a bit.
DISCIPLINE
The science behind losing weight isn’t hard to understand; it’s simply a matter of reducing your calorie intake, eating the right foods, and exercising. There is no magic pill or secret exercise routine needed to lose weight, yet billions of dollars are spent on coaches, diets, and exercise programs because people simply are not disciplined enough to do it on their own.
If struggling traders were trying to lose weight, the outcome would be very similar. There is no secret formula to achieve success at trading. It takes good money management and the discipline to do the same thing every day. Is it any surprise that diet pills and currency trading systems are advertised the same way?
People respond to promises that a pill or a black-box trading system will fix all their problems. If you have problems with discipline in your life, this will probably be the largest struggle ahead of you on the road to becoming a successful trader. Discipline issues are subtle, and even people who seem to have it together could be a mess under closer examination.
QUIT MAKING EXCUSES
- 1.“My Trading System Doesn’t Work”
- 2.“I’m Asleep When the Market Moves”
- 3.“I Can’t Afford Big Stop Losses”
- 4.“My Stop Orders Are Gunned”
- 5.“I Can’t Trade Because . . .bla... bla... bla..."
- 6."My broker is cheater..."
About Kuldeep Nikam
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