By Insideouttrading.com
Are you finding that your trading results are not as consistent as you’d like? Do you want to confidently repeat when you hit winners? Of course you would! Goal #1 in trading is profits. Goal #2 is then making money consistently. Third is steadily making greater profits.
Your trading profits are primarily the result of what YOU do, much more than what the markets do. There are traders profiting every day, so blaming the markets is just an excuse. If you want to profit consistently, then get more consistent in what you do in your trading.
A good starting point is to realize is that trading is a repeated activity. That’s why having a proven trading system is so important. If you truly desire to make improvements in a process, and especially when your goal is achieve greater consistency, the three steps below are ones you can take to dramatically improve your consistency.
Step 1. Clearly define and document your system. One of the biggest mistakes made by traders, particularly regarding consistency is that they don’t take the time to make sure their system is well-defined and written down.
If you often engage in an activity that isn’t written down, there will probably be inconsistencies in how the task gets performed. The reason the military is so big on procedures: they want things to be done in a uniform, reliable and predictable manner. The same is true for your trading.
Step 2. Analyze your system’s critical aspects. A wise man once said that in order to improve anything, you have to start with first measuring it. How else are you to know if you’re making progress? Your trading system has several measurable aspects that make the bottom line what it is, in addition to the all-important account balance at the end of the month.
Businesses in all industries have certain aspects that determine the profitability of the business. Savvy business owners know to monitor those aspects and assign metrics to them. The reason that these are so important is because by measuring each of them, you can then see specifically where to focus your efforts to make specific improvements.
Step 3. Tweak your system through meticulous actions. Once you have an analysis of your system, you can now focus on specific facets of your system to make improvements. By utilizing system analysis, you can make changes to the system and test – with zero risk – either through back-testing or in a demo account and see if the change improves or hurts the system’s performance – and if there are any trade-offs.
As an example, suppose you run the metrics on your system and find that your winning percentage is currently 48 percent. You come up with an idea on how to improve it to 53 percent, which you “think” would increase your overall returns. You then run the analysis on your newly modified system on real market data. Evaluating the results, you can see if this change indeed did what you expected, but also if there were trade-offs in other aspects of your system performance, such as a reduced number of trading opportunities. It will be clear now whether you should incorporate the change or not.
Summary. Trading is a process from which you want consistent – and reliable – results. Trading your system is an activity that you repeat on a regular basis, so if you want consistent results, focus on making your actions consistent.
Step 1 is to make sure that your system is clearly defined and written down. By clarifying your system and then documenting it, you are more likely to repeat what you do consistently.
Step 2 is to run the metrics on your trading for a baseline of where you are now versus your desired goal. This also let’s you see your opportunities for improvement.
Step 3 is to track your metrics and make improvements in a controlled manner and without risking money un-necessarily.
There are several metrics in your trading system that directly determine your profits. Through analyzing your system’s performance and purposefully focusing on these measurables, you give yourself the quickest way to increase your profits. Also, this will dramatically improve your ability to consistently produce profits.
Did you know that it takes most traders an average of more than 7 years to become consistently profitable? Can you afford to wait that long? Acquiring the skill to correctly systemize your trading can allow you to forego years of unnecessary losses and money spent jumping from one trading system to another. Discover the proven way to watch your confidence dramatically increase by going here => http://insideouttrading.com/go/consistent/
