Are You Consistently Inconsistent?

by Vic Noble - Date: 2007-02-20 - Word Count: 624 Share This!

I've been running the Personal Coaching service at ForexMentor since the beginning of 2006, and since that time I've listened to hundreds of people tell me their own personal accounts of the difficulties they've had with their trading. As I've said so many times, the problems that struggling traders have are very common, but also, the habits of successful traders are very common. Over the next few days, I'd like to share with you some of the more glaring pitfalls that show up time and time again in the unsuccessful group.

One of the "real biggies" is a serious lack of consistency in ones trading plan. By that I mean that so many people lack consistency in the way they approach, execute, and manage their trading. So today let's take a look at the first component - trading approach.

When you sit down at your computer to trade, what is your trading approach? Do you have something very specific that you look for over and over again consistently (there's that word again)? If you don't, how do you ever expect to become a consistently profitable trader? You will be chasing the markets forever, looking for the Holy Grail, the latest greatest indicator etc. And that, in my 25 years of trading experience, will not work.

Consider the following analogy: In a sport, say golf for example, have you ever noticed that the same people rise to the top of the game year after year? Why do you think that is? It's totally about consistency in the way they approach the game. They do the same things over and over and over that result in high performance and success. Tiger Woods does not step up to the tee box with a different golf swing every time he plays! And he doesn't change his putting routine every time he putts! And we all know about his focus! So why do you think you can change your trading approach every time you sit down at your computer and still expect consistently positive results??!! Hey, are you a scalper one day, and a day trader the next, but you really always wanted to be a position trader? You've got to get these things resolved!

So one of the most important jobs you have as an aspiring trader is to figure out how best to approach the trading day for you, not for someone else. There is a plethora of trading methods, technical indicators, fundamental considerations etc that you have to condense into a usable plan for you.

I personally believe that most people need a very simple approach that gives them a specific situation to look for day after day. If the market is not set up for the kind of trade you're looking for - DON'T TRADE! One of the most successful traders I have ever worked with only looks for 1 type of situation, and he only gets 4 - 6 trades per month! He knows exactly what his approach is and he doesn't deviate from it. If he doesn't see the set up he wants, he doesn't trade! But when he does trade, he almost always has a successful outcome. Let me ask you this: If he only trades 4 - 6 times a month and is very successful, and you're trading 20, 30, 50 times a month or more and you're losing money, who has more stress?

Take this opportunity to examine your own situation. If you have a sound trading methodology but you haven't been consistent in using it, this would be a great time to re-focus.

In the coming days I'll take a look at consistency in trade execution and risk management - 2 other components of consistency that are absolutely critical.

Until then, keep your risk under control at all times, and be consistent!

Related Tags: trading plan, learn forex, successful traders, trading approach, scalper, position trader

Vic Noble is a personal trading coach and a forex trader. Vic has always maintained a passion for trading and as a result of his years in the brokerage business was able to gain unique insights into the habits of both successful and unsuccessful traders. It was the unsuccessful traders that really challenged Vic to want to make a difference, and so to that end he has now embarked upon a strategic relationship with with the sole purpose of helping people develop successful trading habits.

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