Consistency in Day Trading
If there is a single goal that a trader should have, novice and experienced alike, it should be consistency. Studies have shown that over 80% of traders do not have a trading plan. The most successful traders have a methodology or system that they use in a very consistent manner. Even a bad plan that is used consistently will fair better than jumping from system to system. Consistency is required in deciding the conditions under which you enter trades, exit trades, how much capital you commit to each trade. Traders love excitement, and their view is, if they are in the market they may catch the big move. Well they may - but chances are they won’t. Once you have a trading plan you need to have the discipline and patience to wait for the right opportunity. You can increase your chances of success greatly by simply waiting for the right trade. Have a written trading plan with an edge. Start trading, making small gains and becoming comfortable with your feelings, and use discipline as your main weapon. Systems with a high winning percentage reinforce discipline. If we are trading a system with a low percentage of winners, it becomes increasingly tempting to start skipping trades. Having favorable odds with your system will help maintain the necessary discipline to operate the system exactly as it was designed. Patience is a virtue in trading. There is one rule: never break your rules. Plan your trade and trade your plan. Remember rule no. 1. This in itself should help keep your emotions in place. Trading successfully is by no means a simple matter. It requires time, market knowledge and market understanding and a large amount of self restraint A good trade is made when you follow your trading plan to the letter regardless of a profit or loss result. It is a sign of a disciplined trader. Have a trading plan that sets out your financial goals and why you are taking on this role of being an active investor. You should also have some personal development goals. Your personal development trading goal must be to become consistent. A good way to trade is to wait for the market to CONFIRM a trend is under way, and jump on board. You may not buy the bottom or sell the high, but you can catch the major chunk in between. We can't predict anything the market is going to do. Instead, we react to the market. Winning traders spend most of their time thinking about how traders will react to what the market is doing now, and they plan their strategy accordingly. Systems with a high winning percentage are much more rewarding psychologically. No one enjoys losing. Achieving consistency is no mean feat. As trader John Hayden states: “Indecisive traders will always produce inconsistent behaviour, and consequently inconsistent profits.” ------------------------------------------------------------------------------------------------
About The Author:
Linda Wainman is author of the "Keeping It Simple Day Trading System"
The system that teaches you how to make money with day trading. Visit http://day-online-trading.com
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