Trading in Financial Market involves a huge risk. You can make tons and lose tons of money in the market. Therefore, how to be a consistent trader is a million-dollar question.
What does consistency in trading means?
95% of traders lose money in the forex market. The data is quite similar in stock, commodity and other financial trading. Also, many traders are making huge amounts from trading.
Consistency in trading means staying profitable consistently. However, it is not possible to stay always profitable as the financial market is based on predictions, but it is possible to maintain overall profitability.
A consistent trader is one whose profits are more than the losses from all the trades. These traders can manage their risk and maintain stability even in the opposite circumstances.
A quick glance
Consistency in trading means to stay overall profitable consistently. A consistent trader is one whose profits are more than the losses from all the trades.
There is a huge difference between trading and gambling. If you are trading in forex without a plan or strategy, then it’s pure gambling, and if you are using a proper plan, then it is just a kind of investment.
Risk Management means determining how much you can afford to lose and maintaining that level. 1:3 is a potential risk ratio for traders.
Continuous Learning, trading strategy, Logical Expectations, Use of Technology, Emotional balance, and Risk and Time Management are important to be a consistent trader
How to be a consistent trader
Staying consistently profitable is not as difficult as it looks. You must maintain discipline, keep patience and follow some golden rules for successful trading.
Continuous Learning: Learning while earning is the first and foremost step to staying profitable. Knowledge of the financial market in which you are trading is a must.
Forex, Cryptocurrencies, stock and commodity trading require certain skills. You can only develop these skills after properly understanding the market, its participants, its features and how it works.
You have to understand just a basic understanding is not enough for consistent trading. There are many advanced traders in the financial market.
So, to stand out from the crowd, stay updated and learn continuously. One common mistake that traders make is that they stop learning after a time. As a result, they suffer losses.
Logical Expectations: Traders usually enter the market with a mindset of making unusually big amounts with little investment and no knowledge. As a result, they suffer losses and quit trading.
So, be practical while trading. If you think you can become rich overnight without market knowledge, it is just a trading myth.
In order to earn big amounts, traders usually invest big amounts without keeping risk management in mind. Remember, with high profit; there are high chances of loss.
So, a consistent forex trader makes logical and realistic expectations. Remember, small returns are better than big losses.
Always Trade with a Strategy: The most important point of being a consistent trader is to always trade with a plan.
A trading strategy is a blueprint of when, how, and where to place a trade. Usually, people ignore trading with a plan. However, it is a bad idea.
You are investing your hard-earned money in the financial market. So, ensure you have a proper plan considering risk factors and money management.
Remember, there is a big difference between trading and gambling. If you are trading without a plan, then it’s pure gambling.
If you are a beginner, you can use successful traders’ strategies; you can get them from the trading platforms but do not trade without a plan.
Stay up to date with Technology: In the present time, if you are not using technology in your business, then it is a big mistake.
Trading is similar to business; many tools and software in the market help you in fundamental, sentimental and technical analysis.
Use different AI software and stay updated with the new technology to make maximum profit. Remember, smart work is better than hard work. Combine human intelligence with technology to become a consistently profitable trader.
Trade without emotions: The trade decision of even the most experienced traders is influenced by emotions such as greed, instinct, anger, etc.
In order to make more money in the market, traders tend to spend high amounts. But this is not the right way to trade. In such cases, when they lose money, they also lose calm.
As a result, they will make wrong decisions. Remember winning and losing are a part of the trading game. Logical trading is a must for becoming consistent in forex.
Avoid placing multiple trades: Scalpers and day traders usually place multiple trades in a day. Placing multiple trades means you must monitor all the trades and the market factors that affect them.
However, keep an eye on all the trades. A Consistent day trader should place 2 to 3 trades per day. Placing one good trade is better than placing more bad trades.
So, traders should avoid over-trading as it may result in heavy losses. Especially if you are a beginner, then do not practice over-trading.
Risk Management: Risk Management means determining how much you can afford to lose and maintaining that level. 1:3 is a potential risk ratio for traders.
Putting your whole salary or saving for buying a home in trading is not a good idea. You can put, for example, 5% of your salary. Success in trading highly depends on your attitude.
When there are chances of high loss, traders tend to develop a fear of losing it, and when the amount is small, then trading is fun, and the attitude is also positive.
Focused trading: Another important point in how to be a consistent trader is to stay focused and have clear goals. Some traders frequently change their trading style.
Some traders even switch to market from crypto to stock or stock to forex. But that’s not the right way to trade. Stay focused and clearly understand which market you want to trade and how much you want to make.
Frequently changing trading styles, markets, and plans is not good for long-term success. Even in negative circumstances, try to maintain consistency.
Time Management: Trading demands your time; you must spend at least two to three hours trading. Do not solely depend on your forex broker‘s platform.
Remember, you can only trust yourself. Verify the charts and indicators by yourself to make the right decision. Blind trading may result in heavy losses.
A consistent trader considers trading like his own business and spends time expanding it. Remember, your money is at risk, not your brokers. So being cautious is your responsibility, not your brokers.
Analyse your trades: Maintain a journal of all your trades, the amount you have spent and your entry and exit points. Time to time, analyse your trade and determine whether your profit exceeds your loss.
If you have made a significant amount of money, then well and good, but if not, it means you are lacking somewhere. It’s time to change your way of trading.
Trading involves discipline, patience, money, time and risk management skills. The answer to how to be a consistent trader is simple, by following the above golden trading rules.
However, practically implementing these rules while trading is complex but not impossible. You can become a consistent trader by following a proper plan, maintaining emotional balance, making focused decisions and using technology.
Becoming a consistent trader may be time-consuming, but once you master the art, even in the negative market condition, you can make the most accurate decision.