How To Become A Consistently Profitable Forex Trader
The search for the ‘Holy Grail’ of trading is a pointless exercise, as any experienced trader will testify there is no perfect strategy “out there” waiting to be discovered. Although history never repeats it often rhymes and we can clearly visualise that rhythmic rhyming on our charts when certain repeating indicator patterns throw up high probability set ups offering up opportunities, time after time..
This is hardly a revelation, charts could in fact be a personification and true representation of human activity in the market place, and minus algorithmic intervention this theory holds even more traction. Once we’ve begun to identify certain repeating patterns (that could offer us profitable opportunities) how to take advantage of these repeating opportunities represents a critical stage in what I term our PTD, our “personal trader development” and will undoubtedly help to determine your future success..
The two words “consistently profitable” represent more of an elusive Holy Grail search than the search for a perfect indicator based or pattern based strategy, and yet this two word summation, of the all encompassing reason to trade, is both misunderstood and ignored.
When asked to separate the two words, and rank them in importance, most traders would place profitability ahead of consistency. However they’d be wrong, you cannot possibly enjoy profitability without consistency and the really great news is that if you work on the consistency first and get that ‘right’ then the possibility that profitability will follow is greatly enhanced. So what do we mean by consistency?
Firstly consistency is synonymous with discipline; be disciplined and consistent in your approach to trading. If there are times of the day when your chosen strategy has a greater probability of positive expectancy, then have the self discipline to ensure you’re ready and in a position to take advantage of these opportunities when they’re offered up.
- Be consistent with your strategy; avoid the temptation of radically altering your strategy or adopting a new one due to experiencing a series of losses. Accepting a series of losses is an inevitable part of trading, you have to develop the resilience to not let this affect your decision making. As many experienced and profitable traders will testify, “look after the downside and the upside will take care of itself”.
- Be consistent with your trading rules; if you’ve chosen the highest high or the lowest low of the session or previous trading session to place your stop, then maintain focus and stick to the plan and execute it.
- Be consistent with your take profit orders; there will be countless times when you exit to see price shoot further in the direction you determined, however, be satisfied with your pip take out of ‘the move’, as night follows day price will probably revert back to a mean average close on where you chose to exit, this is particularly common if you’re on a swing trading strategy.
Consistency is not only synonymous with discipline in trading terms it’s also closely related to respect, particularly self respect. Not only must we respect the market it’s also of vital importance to respect the industry you find yourself in. Quite simply aiming to improve every small aspect of how you approach your profession is the standard you’d no doubt demand of yourself in any industry, as a self employed trader these demands are magnified.
In taking a consistent, disciplined and respectful approach towards all the facets of your industry will provide you with a solid platform for future success. Adding effective strategies then becomes straightforward. Once you marry these two concepts you will fashion an edge to your trading that can be exploited profitably for many years to come.
« IMF Slashes Its Global Growth Forecast For 2012 Which Predictions Are More Likely To Come True In 2012, The Maya Or The IMF? »
