Why is it important to be consistent when trading? Consistency builds habit and having good habits ultimately defines who we are as people. Consistency in sticking to an effective trading strategy, this will help you to master that trading strategy and will allow you to see if that strategy is really working for you or not. You cannot use a strategy for a month and say its not working for you, you need at least 6 months of constant trading with that strategy to determine if it works for you or not.
Stay consistent in risk management, keeping your money risk per trade consistent, allows you to keep your losses under control as well as your emotions. If you vary your risk from trade to trade, your emotions will be like a rollercoaster and you will end up giving back all your profits and eventually blow your account. Keeping your risk consistent after a big win or big loss is key and is an important skill to have in trading.
Keeping a trading diary is important but keeping it up to date and consistent is even better. It wont help if your diary is written in once a week for only a few trades – it needs to be full of all your trades every day.
If you consistently trade according to your strategy (do not over-trade), consistently manage your risk properly and consistently maintain your composure after every trade, winner or loser, you will give yourself the best possible chance of making consistent money in the market. However, if you choose to behave erratically by straying from your strategy (over-trading), risking too much and generally gambling your money in the market, you will develop account-destroying trading habits. Most traders lose money as a result of having very inconsistent trading routines and never following through with their trading strategy or risk management plan.
You have the power to decide what you focus and put all your energy into. You can decide to continue trading inconsistently and making irrational choices, or, if you want to be a consistent trader, focus on what will make you a successful trader. There are no shortcuts when it comes to trading, the work you put in, the time and dedication you put in will show in the long run, there is no such thing as easy money. Don’t rush, don’t chase the trades and don’t over trade. Keep in mind that there is a lot that can go wrong, but know that you have the power to stop it from going wrong.
Ryan Mowatt, The Performance Coach