Making consistent profits is the ultimate goal of passionate forex traders. Winning a trade is easier, but maintaining a winning streak is something only some can do. Why is that? Why do some traders get consistent results and others do not? Read More
Becoming a consistently profitable trader is challenging for many reasons. Being a repetitive activity, trading works in a loop, requiring you to apply the same trading strategies and methodologies to get results. This could discourage and bore traders if they do not see the results they expect. At this point, you are more likely to quit. Consistent profits come with consistent inputs and learning. From working on your trading system to following the same trading schedule, you have to follow a routine to get the desired results. Thus, not only your skills but also your determination to attain trading discipline define whether you will become a consistent trader or not. A consistent trader is someone who makes consistent profits. This means that they lose fewer traders and achieve the targets that they have set for themselves. However, it doesn’t mean that consistent traders do not lose any of their trades. They do, but they know how to recover and adapt themselves to market requirements. For example, if a trader opens 5 trades a week, we can call them consistent if they win 3-4 trades weekly. Moreover, consistent traders follow their routines and rules well. If they have set a specific margin to trade within a day, then they won’t exceed that margin regardless of the market movement in their favour. Most traders use a margin calculator tofind out the appropriate margin required as per their risk appetite. You can trade with the same discipline and manage your risk well. If they want to trade with a leverage of 1:20, they will make only the deposit that is required, which is calculated with the help of a margin calculator. 1) Understanding of the technical and fundamental analysis 2) Knowledge of the trading psychology 3) Self-awareness 4) Sound risk and money management 5) Determination to learn from their mistakes and losses. The purpose of consistency is self-explanatory. If you are a consistent trader, you will achieve the results that you expect more quickly. Inconsistent traders struggle in the market and are more likely to quit or engage in overtrading. But how is consistency achieved? Let’s learn that. Becoming a consistent trader is easier when you have a strategy that gives you an edge. However, the problem with trading strategies is that they need to be adaptable. Because of changing market conditions, strategies may fail or no longer work. Therefore, you need to re-work them again and again. Naturally, this would also mean you would not win all your trades. There will be trades that you will lose. In order to develop a consistent trading mindset You should review and analyse your trades. You should be analyzing both winning and losing trades. This will help you understand what’s working for you and what’s not, which will help you maintain an edge. Becoming a consistent forex trader requires consistent, compound effort. You can’t trade twice a week and expect to never lose again. On the face of it, losing is normal, It helps you to work on what’s missing. However, you need to strengthen your trading system to be consistent in your results. You can achieve this by learning more about the market, backtesting your strategy, and keeping realistic trading goals. While moving towards your trading goals, do not be too hard on yourself. You can’t escape losses – they might even come in a long streak. But if you come back with a learning mindset and determination to see the best possible results, finding and maintaining your trading edge is not so difficult. Who is a consistent forex trader?
Skills of a Consistent Trader:
Why Consistency in Trading Matters?
How to Build Yourself as a Consistent Forex Trader
One problem that stops traders from becoming consistent Forex traders is having multiple trading systems. Why is this a problem? Although having multiple trading systems gives you a backup strategy to rely on, it can make trading confusing for you. Often, traders need to improve their trading strategies in such cases, leading to consistency or no trading outcomes.
When you have one trading system to rely on, you can work on the details of it and adapt to the current market situation. However, juggling two or more trading systems takes up too much time for the traders, which can reduce the efficiency of the strategies.
Another similar problem with strategies that traders face is that they don’t create strategies that suit their trading needs and styles. All traders have different mindsets. Some prefer to trade part-time, while others like to trade during the graveyard shift.
In addition to that, the differences in trading goals and preferences of two traders ensure that the strategy of one trader may not apply to others’ trading systems. If you create your strategy, you will be able to align it with your trading requirements, leading to consistent profits.
Also, you should use trading tools to plan your trades, as they will help you check which trading opportunity is worth the risk based on its profit-making potential. This will help you avoid pausing your consistency if a higher risk is involved in entering a trade. For example, suppose you are trading different currency pairs that don’t include the base currency of your trading account. In that case, you can use a currency calculator to convert the price of other currencies in yours to get an idea of how much capital is being put at risk in each trade. This will help you manage your risk a lot more efficiently.
Often, traders think that consistency comes with placing more traders, leading to more profits. Although it is a good idea to trade regularly, it doesn’t guarantee that you will make more money or become a consistent trader.
If you learn to save your trades from the market’s risk and volatility, you will get consistent results sooner. All this is achieved with the help of risk management. This requires you to set up different risk management tools – such as stop loss, take profit orders, etc., to manage your risk. If your risk is under control, you’re more likely to achieve the result without dealing with huge losses.
How would you know whether you are making any trading progress? With the help of a trading journal. A type of database of all your trading activities—a trading journal—is the ideal way for you to keep track of your trading positions.
You can even check the performance of your trading strategy over time, make the necessary changes, and implement the strategy on a live account. As a result, you can improve the consistency of your trading outcomes.
Final Verdict