The 5 Stages of a Traders Career: #5 The Consistency Phase - Bulls on Wall Street

The 5 Stages of a Traders Career: #5 The Consistency Phase

You’ve finally started to see several consecutive months of green, and have experienced significant growth in your trading account. All the hard months of suffering and pain are starting to pay off. 

Even when you start seeing consistent results, you have to push your limits to remain consistent. So what exactly does a successful, consistent trader look like? Here’s the main factors that cause consistency in your trading, and how you can make a breakthrough in your trading career:  

Finding a Niche

One of the biggest causes of trading consistency is a trader finding their niche and sticking to it. With so many stocks moving every day, it gets very tempting trade random stocks that are outside of your niche. Many traders struggle with consistency because their niche is not defined enough, or they don’t have the discipline to stick to it. 

Once you reach the consistency phase of your career, you know exactly what setups you trade, and you have a concrete system for your position sizes. The more defined your trading system is, the less uncertainty there is in your trading. Consistent traders have such great patience because they know exactly which setups to sit and wait around for.   

Risk Management

A major difference between consistent traders and inconsistent traders is their risk management. A common cause of inconsistency in trading results is having big losers that wipe out weeks or months worth of profitable trading. They are taking 4 steps forward and 6 steps back.

Limiting your downside on losing trades is what allows you to succeed in the long run in trading. Your win percentage becomes less important when you really focus on having a strong risk vs reward ratio. Your winning percentage could be as low as 40%, but if you risk vs reward ratio on your trading is greater than 1:2, you will still be profitable.

Mastering Their Psychology

One of the reasons successful traders achieve consistent results is that they’ve mastered their psychology, meaning that they’ve mastered control of themselves. Being human, we are inherently not wired to be successful traders. We get emotional about losing money, we are risk-averse, we get greedy, ect.

In order to prevent these destructive instincts from damaging their trading results, consistent traders develop ways for coping with their psychological issues. For example,  if you are a trader with issues with revenge trading, you will have a daily max loss set on your trading account to prevent you from having huge red days. All great traders are extremely self-aware, and take measures to prevent self-sabotage. 

Increasing Size

As you start to find consistency in trading results, it comes time to start increasing your trading size. Just like if you were an employee in a business, you get to give yourself a raise for your great performance. However, it is crucial you understand the correct way to increase your position sizes. Increasing your position size does not automatically make you more money.

Increasing your position size too fast and by too much will bring emotions into your trading. You should gradually increase your position size over time. If your max risk on each trade is $500 per trade, you should increase your position size based on how much your trading account is growing. If you have a great month and your account by 20%, you should increase your risk to $600 per trade to keep it proportional to your account size.

Free Trading Webinar

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