3 Tips For More Consistent Trading Results
Today, the world of trading has been depicted in many TV shows and the characters take up roles that display how trading can make you wealthy and be able to afford corporate jets, holiday homes and luxury cars. Yes, there may be flashbacks revealing how a certain character started life from rags and now he or she has attained the wealthy status.
The one thing these TV shows don’t reveal is the actual struggle that successful traders undergo to become who they are today. Every beginner may have the notion that trading is easy because all you need is to download a program, install it, connect to a platform for signals and sit back to watch your account grow.
The road to success is filled with up and downs – today you may achieve a win but in the subsequent trades you may suffer loses. Real traders who are passionate draw their strength from experience and this helps them through the many hurdles. So, what do newbie traders have to do in order to achieve more consistent results in trading?
Develop A Consistent Routine
Ever heard of the saying “Plan your trade and trade your plan.” Let’s dissect the first part – plan your trade. It is important to come up with a plan which should be composed of an entry and exit strategy plus a money management system. It is wise to base your plan on market observations and experience which can only be attained through research. Yes, research can be time consuming and challenging but in the end, the data and information gathered will allow you to develop a profitable plan.
Trade your plan – now that you have developed a profitable plan, it needs to be incorporated into your system. Consistency is key to a successful venture so you need to follow the plan diligently. No excuses should be made as deviating from the plan will not only lead to poor results even if they turn out to be profitable but it will be considered bad trading. The good thing about trading today is that you have digital tools that help to make your work easier. All you need is sign up to a reputable platform, access your account and trade with profitable signals.
Remain Disciplined & Adhere To Risk Management Rules
Did you know that discipline is a bridge between your accomplishments and your objectives? Well, now you know and if you want to become a successful trader, you have to cultivate discipline. Losing discipline can happen to any trader which may be as a result of your state of mind and emotional feelings. If you cultivate discipline, you are able to stay focused during trading which enables you to keep track of every trade. By maintaining focus, traders are able to overcome internal and external hurdles finally achieving success.
Discipline goes hand in hand with risk management. Successful traders will attest to this – when a trader adheres to risk management rules for stop loss per trade and max stop loss for a day they are assured of success. The reason why risk management is vital is because it eliminates the chances of 100% ruin. This happens through unexpected low probability events which results in a string of losses. You need to know that past successful traders have learned this lesson the hard way. So, you don’t have to blow off your trading account.
Set Realistic Goals
The one thing you will learn when you begin trading is that not every single trade is going to be a home run. To become successful, it is highly suggested that a trader focuses on base hits. It is important to set realistic goals which are achievable rather than unrealistic goals that are not achievable. Not only will realistic goals keep you inspired but you will maintain your streak towards success.
Let’s take an out of the box example – you have $500,000 having saved for a few years after getting a successful job. You have yet to attain 30 years of age and you have a loving fiancé. Do you buy a house that will provide a roof for you, your future family and can be turned into an investment or will you buy an expensive diamond ring and spend the rest in a lavish wedding?
This is the same with trading – you can set a realistic goal like earning $500 to $5,000 at the beginning of trading each day or week rather than $500,000.
Trading is like an adventure – you will encounter ups and downs on the road to success. To become successful, you have to be persistent and diligent. You also have to come up with realistic goals, remain disciplined, come up with a risk management plan and finally, develop a consistent routine. Furthermore, you need to cultivate a deep passion and connection to trading.