It is not much difficult to make a profitable trade or even a series of profitable trades. However, to keep the profits & accumulate them in the long run is indeed challenging & that’s why consistency is the most desirable skill one should aim for.
Consistency is simply the outcome of a carefree & objective state of mind. Let’s try to understand these terms better: A carefree mind is always confident but never euphoric. When you are in a carefree state of mind, you do not feel any pressure, anxiety or stress to do what your system requires you to do. Objectivity, on the other hand, is nothing but keeping conscious access to everything that we have learnt about the nature of the market.
Creating a belief that “I am a consistent winner” is the primary objective of any trader but the true nature of Consistency is a bit abstract. So, let’s try to break it into several actionable rules as follows. These seven rules, when followed properly, become the backbone for stability & psychological wellness of a trader in face of challenges.
I am a Consistent Winner, because:
1. I can define my trading edge in objective terms.
2. My Risk of every trade is pre-defined.
3. I am strong enough to accept the risk.
4. I act on every edge of my system without hesitation or reservation.
5. I need not push myself for profit. I understand that profit is just a by-product of disciplined approach.
6. I keep an open mind to learn new ideas & test them. I always monitor myself for mistakes. A mistake occurs when I deviate from my trading plan.
7. I understand the absolute necessity of following these rules to achieve consistency & therefore I promise to myself that I shall never violet them.
That’s the beauty! Consistency is nothing but a belief system! It has little to do with your actual P&L statement in Ledger balance and more about your psychological make-up towards risk management. We at Proficient, hope you adopt the right approach & prosper in your trading career. Next week, we will be back with more insights on Trading Psychology. In the meanwhile, you can write to us with any trading related issues.
(Our Sincere thanks to Mark Douglas. The above little piece of wisdom is taken from his classic text: ‘Trading in the Zone)
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