Trading Consistency: How to stop losing?

trading consistency trading tips Feb 16, 2024
Trading Consistency

Reading Time: 9 min

While most people get into trading to make money they end up losing them. I think it would be fair to say that not being able to keep the bigger portion of the trading profits and consistently ending with less money on the account drives many traders insane around the world.

Achieving consistent profits is the biggest challenge most traders face. The psychological rollercoaster of making and losing money does more damage to traders than just the loss of capital. That’s why today, I want to explore deeper into the psychological aspects—or mindset—that affect your trading consistency. Additionally, I will provide some tips on how you can stop that “merry-go-round”.

Why do traders struggle with trading consistency?      


The psychological aspects of trading
are something that not many traders take seriously. They experience them daily with often very serious consequences, but when it comes to taking immediate action to work on their mindset, they are more likely to wait for the “right moment”.

Just like one might do with a very thick book that you know you should read. You sort of want to, but placing trades and hoping that “today is the day when things will be different” is just so much more exciting.

Regardless of whether you believe it or not – all the stars in the sky (the statistics) tell us that profit consistency in trading is closely related to the degree of a trader's consistent approach, strong emotional resilience, disciplined trading mindset, and empowering mental skills.

So, if you have been giving away all your profits for longer than 3 months, seriously consider finding “the right moment”. And at least do an honest check with yourself on how you score on those points.

Let’s face it. Most traders are not even aware they can use their mindset skills in trading intentionally. Leave it alone, taking time to develop them! Most just go to their trading desk and do their best!

The only problem is, in trading your best is not good enough. And if you don’t understand it, it will never be good enough.

Why? For a start, you are coming into the market environment with a set of beliefs and thinking habits that are working against you. Plus, by consistently losing your trading profits over an extended period, you have conditioned your nervous system in a way that is making you repeat the same sabotaging behaviors (and mistakes). And this is just the tip of the iceberg!

So, while you are on the one hand trying to achieve profit consistency, you are sabotaging your efforts on the other! It’s like trying to pump the water out of your boat, while you have a hole in the bottom. You get frustrated and exhausted living the illusion, and your boat WILL eventually sink.

This dreary scenario is not just something that might happen occasionally. It’s not reserved for some distant individuals you have never heard about. It happens ALL THE TIME. It happens to roughly 95% of traders. So, there is a 95% chance that it WILL happen to you.

I don’t mean to scare you, but that’s the truth. I did not make it up. The best any trader can do is to increase the probability of making the 5% cut.

Today my goal is to help you increase awareness about trading consistency and by that help you increase your chances to succeed. So, let’s dive into it!

 

What aspects of your mindset affect your Trading Consistency?

  1. Lack of understanding of trading consistency
  2. Mismanagement of setbacks
  3. Ambiguity of do’s and don’t’s

1. Lack of understanding of trading consistency

Consistency by definition is something that can be only achieved and measured over time. This means that to determine your trading consistency you need to 1. Take time to build it and 2. Measure your performance long-term. 

Many traders make the mistake of trading a strategy for a short period and when they don’t book the profits, they change it. That brings them to square one and they have to start the whole process all over again.

And let’s be clear here. It is not just starting over the learning process of the new strategy. It’s starting the building process of your consistency all over!

Yes, consistency is something that you need to build. 

It does not just happen by itself. Consistency in trading is a dynamic process and it requires ongoing evaluation, adjustment, and refinement over time. 

If you give up your strategy just because it doesn’t make you money (but it does work for others) you waste all your time invested plus all the valuable data. And I mean data that is specific to how you trade, your traits, and your performance level.

Remember that to grow in your trading you need to keep developing your skills. Those include not just how well you can execute the trades, but mostly how consistent you can follow your strategy. And the latter has everything to do with your mindset skills. 

 

πŸ’‘ Important Note: You are never done with building consistency. Even though we all talk about achieving consistency, it’s very misleading. Because once you start booking consistent results you have to keep doing what’s working and make sure you are consistent in it.  Otherwise, your results will change. 

 

And that’s why consistency is so difficult! 

Because not many people can always behave in the same way and keep the same attitudes. That requires a disciplined mindset, an empowering set of beliefs, and strong mental skills to get yourself out of your way, so you can keep your performance consistent.

 

So, where can you start?


Assuming the strategy you are trading is working for other people, but you - don’t just trade it. Work on it! Put your efforts into building consistency and focus on the process. Stop trying to make money.

Build your consistency muscle. Work on doing an activity consistently (including your thinking activity). Agree with yourself on 3 non-negotiable things you are going to do every day no matter what. And stick to it for at least a week. Then a month. 

πŸ’‘ Important Note: Don’t go big to start with. It could simply be taking a small break after every trade. Or take a walk outside during the lunch hours. Small steps can make the longest journey!

If you would like some ideas on what small steps you can take download my free guide "10 ways to improve Consistency in Trading". 


2. Mismanagement of setbacks

Setbacks often derail the progress of many traders. Paying attention to every loss and bringing it with you into the next trading day makes you focus on the mistakes you are trying to avoid. The result? You get what you don’t want - more setbacks!

Because where your attention goes your energy flows. 

 

Remember that one mistake or falling back into an old behavior pattern does not mean the consistency is gone. And the worst thing you can say to yourself when you fail is “Oh man! Not again!”

 

πŸ’‘ Setbacks are just part of the process. They give you the feedback you need in order to improve and adjust your process. 

 

So, where can you start?


I know losing money is not fun. But it is PART OF TRADING(!). Building your emotional resilience is going to make it much easier to digest. 

So, start with focusing on your process and evaluate what’s not working overtime. Then make adjustments. 

Stop putting your attention on your losses, how many red days you had, or what you did wrong. 

πŸ’‘ Remember: To be consistently profitable you don't have to make money every day, you don’t even have to trade every day! 

Executing trades is the smallest part of trading. The rest is working on your mindset, mental skills, and consistency.

3. Ambiguity of do’s and don’t’s


When you are a trader you are in a constant split between choosing what’s right and what’s wrong. Decisions that seem to be in your best interest, such as not taking a planned loss trying to avoid pain, prove to be wrong and cause you more pain in the end. 

One of the most repeated thoughts coming back into your head is “I should have…”. 

You took profit at target  “Good job! I followed my plan!” Then you see the price going higher “Darn, I should have waited!”  

Next time you wait. “I am gonna be patient this time!” and you see the price is pulling back. Now the profit you just had is gone! The frustration kicks in and you start beating yourself up “I knew I should have taken profit at target! Why am I so greedy?!”

No matter what you do and how good you feel about it at first, your decision may turn out to make you feel miserable. The ambiguity between the dos and don’ts can cause not only confusion and frustration but also put you in a situation where it seems you are always wrong.

So, it is incredibly important to bring alignment into your decision-making process. What it means is aligning your beliefs that direct all your actions with your goals as a trader. Let me explain.

Most decisions a trader must make feel irrational to most people, they cause fear and lots of discomfort. And that’s because the market operates in a very different way than most environments in our daily lives. So, you have to do things differently than you are used to. 

Most things you need to do in trading are against what you believe and how things work. So, there is a misalignment of how you believe you should act and how you should be acting to achieve your goals.

And that’s a problem. Because most of the time what happens is, even though you know you should go right, you decide to go left. And after you lose money, you keep wondering why you just didn’t go right. You knew you should! 

Oftentimes that leaves traders feeling like a failure and some sort of an idiot who keeps acting against his interest. And every time it brings more guilt and shame making you wonder what’s wrong with you.   

So, now you see why your beliefs and your trading goals must be in agreement. If these two are misaligned you will have trouble executing your plan and controlling your impulses while trading. Your beliefs will dictate your actions and when they are not aligned they WILL sabotage your efforts. They will always win. 

 

So, where can you start?

 

Take a closer look at your process. And instead of asking yourself the question of why things are not working, start asking HOW. 

  • How do you do what you do?
  • How do you talk yourself into decisions you know you shouldn’t be taking, how do you talk yourself out of promises you made to yourself? 

πŸ’‘ Important Note: Start observing your internal dialog, because that will tell you a lot about your beliefs that direct your actions.

 

Without becoming aware of how your beliefs impact your behavior, you just keep going and repeating the same mistakes and getting the same results. 

So, becoming more aware of this process, of how you think and how it makes you act will help you recognize the thoughts, behaviors, and emotions that get fired off by the triggers. And then you can introduce new thoughts, and new beliefs and condition yourself in a new way. A way that supports your efforts to achieve your goals. 

And that’s when your life starts changing.

This process of exploring your behavior patterns is not easy, and I fully acknowledge this complexity. Actually, it was this very realization that motivated me to support others! So if you find yourself in trouble with consistency and you want to discover the patterns that make you act against your interest in trading I can help you with that. I can help you discover the beliefs that sabotage your progress and align them with your goals. You can learn more about it by clicking here.

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