Not so easy to stay consistent Forex trader in the market where the money can be taken in a second but also lost in a second. The market where trading signals lure you to trade on every website you visit.
Consistent Forex trader fights against bad trading signals, against scam people who wants to take the money from your pocket. Consistent Forex trader follows same trading routine each day and night and search how to be even better.
This is all Forex truth.
This post is meant to show you what you need to make yourself consistent Forex trader by avoiding common trading mistakes many traders do on a daily basis.
- 1 What is Consistent Forex Trader
- 2 How to Build Yourself as Consistent Forex Trader
- 3 Have a Trading Journal
- 4 Conclusion
- 5 FREE WORKSHOP
What is Consistent Forex Trader
Consistent Forex trader is the trader that consistently take the money from the market. If you are consistent Forex trader then each month is profitable and your trading account balance rises steadily.
You can plan that each month you will have some amount of money on your trading account because your trades are more profitable than not. The risk management plan you have defines risk to reward ratio.
You follow your trading strategy that protects you from over-trading. The trading strategy demands from you to:
- follow your trading plan
- make an analysis of each possible trade
- define when to enter and when to exit from the trade
- protect yourself from over-trading
- record your trades
When you follow your trading plan, risk management, when you record your trades you do the same thing all the time. You just repeat what is in the trading checklist.
Each day you search for the same pattern, same signal, make same analysis, trading routine does not change. You would say it is boring job to do each day.
It is not boring if you do it properly. By doing the same thing all the time you can find patterns that must be improved. You need to evaluate yourself each day and improve what can be improved.
Why Consistency in Trading Matters
Being consistent Forex trader demands that you follow certain rules. Those rules protects you from you own. You as a human are one of the biggest enemies when we talk about trading.
Consistency in trading matters because it protects you from your emotions. You as your biggest enemy in trading bring the emotions into trading which have great impact on the trading decisions.
Emotions bring irrationality into your decisions and move you from consistency. If you do not follow your trading strategy rules and find the trade signal which is not completely by your trading strategy rules, that trade signal can become possible trade signal if you let your emotions in.
You start to see that signal as very promising even it is not by your trading strategy rules. Even though that signal is not 100% confirmed by the trading strategy rules you open that trade because you think it can be very profitable. By doing that you start over-trading.
If you do not let your emotions get in your trading decisions and you open the trade only by the trading strategy rules you will have more consistent results.
It is very important to stick to your trading rules for opening the trade. If you do not stick to the trading strategy rules you will have variable results. Variable results are not inline with consistency.
How to Build Yourself as Consistent Forex Trader
How to be consistent Forex trader starts with the consistent trading strategy. You need to have a plan when to enter and when to exit, have a consistent routine when to make analysis.
As a consistent Forex trader you need to have risk management plan which will define how much you will lose or earn on each trade.
After each trade is closed you need to make a record for later analysis. That way you are making a path for improvements. By recording the trades you can see where are consistent results which you could repeat again.
Have One Trading System
First step and one of the most important to be consistent Forex trader is to have trading strategy. And only one trading strategy.
You need to avoid having two or more trading strategies because you need to make a trading frame which will maintain your focus on the correct steps.
If you have more than one trading strategy you will eventually start to mix rules from those strategies. You have to make only one so you do not paralyze your self with analysis. To many analysis can make you confused and then you do not know when to open the trade.
By following only one trading strategy you will narrow your energy to only few tools and rules which is much easier to follow than large list of rules.
By narrowing your efforts to only certain rules you need to be determined to execute the orders only by the rules. Those rules tells you all what you need to know in order to be successful.
When the order is executed by the rules you do not need to waste any more time on that trade. You can focus on finding another one and prepare yourself for it.
That way you are setting the path to be consistent Forex trader.
Have a Trading Strategy That Suits You
When making a trading strategy you need to make it so it suits you and your personality. That means to make a trading strategy which will have rules that are easy for you to follow. Strategy should reflect your trading style.
If you make a trading strategy that have rules which you think that are hard to follow, or you think that they can be a little better or slightly modified, you will eventually make mistake.
The mistake will make you deviate from your initial trading strategy and at end you could end up with completely new strategy that can be profitable or not.
You do not want that to happen so you need to make sure that the trading strategy is the one with which you feel good. When you read trading rules you read them easily, follow them without any problems. When you see the trading signal all the check points from the trading strategy are easily checked.
The trading strategy is your friend and you have to feel good when reading it.
Practice and test your trading strategy by demo trading before going live so you confirm that the strategy is profitable. That way you will start trading with real money with the profit and not losing your hard earned money.
Use the Risk Management to be Consistent Forex Trader
Risk management plan is the step where many traders fail. You need to avoid that form happening.
Taking a risk on each trade must be approached consistently if you want consistent results. If you do not follow the risk plan you will have different results.
Forex trading is all about probabilities. If you stick to the same risk plan on each trade at the end you can sum all trades and have the result. You can see how profitable each trade was and what you have lost.
If you do not have strict risk management plan on each trade you cannot make a conclusion at the end because each trade is different. You cannot use general result on all trades but you need to analyze each trade and see how profitable is.
Take this situation as an example.
If you open 1 trade with 5% loss, second trade with 2% of profit, third trade with 1% of profit. Even you had two trades with profit and one losing trade you have ended up with 2% loss.
If you had strict rule where each trade can have 2% loss and 6% profit then you would know that if you have 2 bad trade and 1 profitable you would end up with 2% of profit.
Very important think to remember is to have risk management plan with strict risk to reward ratio for long term success.
All trades you open and close should be recorder so you can make analysis for the improvement. For that you need to have trading journal.
Have a Trading Journal
Trading journal is a tool that can improve your trading results by 100% if used properly.
Trading journal can be set as daily, weekly or monthly journal where you record your trades. Records should have parameters that can be analyzed.
By analyzing trading parameters you can improve decision making process much more effective to get better results. By doing the analysis you are being consistent and even improving in certain trading areas.
Review Your Trades and Find Your Trading Edge
If you want to be better you need to make you better. Simple as that.
To do that you need to:
- know more
- you need to improve what you are doing right now
- you need to stop making mistakes with what you doing right now
In Forex trading you can do all three things at the same time. I will now touch only the last thing from the list and slightly first two because they are close connected.
Trading journal is there for you to see what you are doing wrong and what you are doing correctly. The things that you are doing correctly needs to be repeated again and again to reap the same results.
The things that must be fixed are the things that do not bring you profit with each trade you take. Those trades must become profitable or at least not repeat them again.
You need to take bad trades out and see where the trades do not fit into your trading strategy. Why does trades do not give the desired results.
If you have open the trades by the trading strategy rules then all should be fine. But the market does not react all the time in the same way.
You need to adapt to the market and change some rules or you need to avoid those trade signals if they appear again. That way you are reducing the number of bad trades and consequently stopping the account balance from reducing.
When you make analysis for those trades you will find what you can improve on the trades that are slightly profitable and make them more profitable.
Eventually, your goal to become consistent Forex trader is to reduce the number of bad trades in your trading journal and increase the number of profitable ones.
Being consistent Forex trader is possible and it takes time and energy to become one. You need to change yourself being more disciplined, patient and eager to be better trader.
There are tools you can have and you should have that helps you being consistent in your trading.
You need to adapt to new market moves and having trading journal you can see what you need to change to make that happen.
By being consistent you can be profitable which is the ultimate goal of all traders.
For beginners who does not know how and where to start with trading
In the workshop I will tell you
what steps to do in order
to transform yourself into a trader