Importance Of Consistence In Trading
Consistence in trading is a situation where one uses same tools, techniques approach over and over again profitably. Many traders face challenges of consistency in their trading journey, today they win and tomorrow they lose it all.
Developing a trading consistence
- Set up a personal trading journal, you can use a spreadsheet.
Capture important information, physically or electronically like:
- The instrument you are trading
- Your target for the day
- The trend of the trade
- The reason why you took the trade
- your entry point and lastly screen shots of the proceedings
Keeping a record helps you to develop uniformity as you go, you can determine what works for you and what does not, you can analyze a trade after another and further develop your working strategy.
Why is it important to be consistence
- It helps you to maintain your strategy, Let’s imagine that you have just spent the last six months perfecting your very own strategy, you use a number of entry criteria and a number of different exit criteria which are all based on certain patterns or values within the markets. If you were making consistence profits then you know your strategy works.
- It helps you maintain your confidence, with the market setups of the same nature keeps coming and when they do if you are consistence you enter without hesitation
- It helps you maintain your results
Even when sticking to your plan, there will be losses, it is important that you do not let this change the way you are trading, five profitable trades and a loss is still fantastic going, far better than many would do, so a few losses are simply the markets telling you not to get too confident, but rest assured that your plan is working.
Should you decide to change something, test it out on a demo account first, when you are sure the changes are effective, change them for all future trades, not just one or two, being consistent in your changes is also important.