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Trading Education Posted by Team Topstep August 9, 2022

7 Methods For More Consistent Trading


7 Methods For More Consistent Trading

In a previous article, we highlighted the necessity of consistency while trading. This is one of those areas that we all recognize to be important but often overlook. Rather than examining how we can create constancy, we tend to look for super secret indicators and strategies. 

Last time, we considered the benefits of a stable trading environment. In this article, the conversation moves beyond the “whys” of consistency into the “how” dimension of this key attribute. In other words, if you want to increase consistency, below you will find methods to assist you in the growth process.

As always, you need to read content the same way you analyze the markets – with a critical eye. No content can change your life simply by reading it. However, these reflections serve as a tool that enables you to get started putting in the work toward improving yourself. The intention is for you to treat this article as a conversation partner, engaging with self-understanding and recognizing which portions are necessary for you to adopt and adapt for your own purposes. 

Plan for Consistency

Okay, I’ll start with a softball. Even if you know you want to be consistent, achieving this doesn’t come automatically for most of us. It comes through a process of planning. Suppose you are going to make the most of your potential trading career. In that case, every area of your life and trading must be accounted for and considered in order to generate dependability. It requires putting an infrastructure in place that will keep you on track. Now that we’ve established this, we are ready to move on to the next thing.

Live Consistently

Unfortunately, I’ve met too many traders who thought that even with an inconsistent lifestyle, they could somehow trade consistently. Sadly, this outlook produces predictable disappointment. I’ve had a decade and a half of experience observing traders who performed exceptionally well and also those who frequently encountered failure. I can affirm this: I never saw a regularly profitable trader who did not have a routine. 

One way to begin is by setting parameters to ensure proper sleep. This means going to bed and waking up at consistent times. In addition, this enables you to conduct a healthy pre-trading morning routine of diet, exercise, and preparation for the day. 

Scheduling sleep is but one example of lifestyle consistency. You can also examine the habits you’ve developed in your social life, relationships, and financial habits, and then consider how stability in all these areas will breed further consistency.

One example that comes to mind involves a trader who found value in attending a place of worship each week. In his case, he began to realize that when he missed this time of religious devotion, his trading would be affected later in the week. Now, perhaps this was because of some higher power. However, it’s more likely that it was because he had altered course in a personal area of life that was important to him, which translated to broken consistency in other aspects of his week, including trading. 

This concept can be adapted to various scenarios by each of you according to your life routines.

Prepare for Consistency

Preparation is another crucial habit. One trader told me simply that when he prepared for his day, he was generally profitable, but when he didn’t, his losses mounted. Stability in preparing for a trading day means putting in the necessary time to analyze your charts. For some of you, this may be more involved than for others. However, for those who manually draw trendlines and other notes on your charts, it’s absolutely essential that you make the time to do whatever you do best to start each day. 

Trade the Same Time Frames

I have found that traders who constantly adjust their time frames are not usually successful. Maybe you have not found your ideal time frame, and if that is the case, then your issue is more about system failure. However, for those with a solid system, it is best to learn to trade during the same time frames during the day. 

For example, there is particular behavior in the markets at the session open as opposed to later in the day. When you trade during the same time frames, the market and that specific time of day become a friend. You end up with a better idea of how your market should act within that time period. 

Trade the Same Markets

This idea echoes the sentiment of the previous section. If you shift your concentration among different markets, chances are you lack a consistent system. In that case, your first step is solidifying your system; otherwise, you may regularly encounter disappointment. However, there is another way of looking at this. 

I knew a trader who had a good system. His problem was that he would get bored with his best market(s) and seek to fish around other charts looking for opportunities. In my experience, there is a sharp distinction in the level of success for those who are trading what they know as opposed to what they are not used to. 

Inconsistent trading, as in being in one market one day (or hour) and a different one the next, is an inconsistent attribute that will frequently produce undesirable results. 

Be Consistent With Your Risk (and Reward)

Now, before I dig into this, I’ll preface. You may have a system that calls for a separate risk function from one market variable to the next. In that case, if your system is well defined and tested, I’m not referring to you. Instead, what I am attempting to identify is traders who just decide to randomly “wing it” and elect different risk-to-reward components from one trade to the next. The problem is that this is usually the result of subjective reasoning deriving from emotion rather than from the functionality of market statistics.

Follow Your Rules Consistently

First off, if you don’t have rules, then I’d suggest you ascertain some. However, for those that do, you know it is much more challenging to keep rules than to generate them. Of course, any long-term seasoned, experienced, and successful trader likely knows when to sidestep a rule; but that goes beyond the current discussion. 

Keeping your rules is a much more sustainable and robust approach to trading than deviating from them. I know a seasoned trader who is aware of when to break the rules. However, she is so programmed that she determined some time ago that she’d rather keep the rules and miss out on some quick profits than break the rules at all. 

If you frequently renegotiate your rules, you are unlikely to be successful; just think of all the mental energy that trading takes. Frankly, we don’t need to subject ourselves to the greater level of fatigue that ensues from the process of bending or breaking the rules.

A Final Thought

Long-term successful traders know that critical self-assessments and adaptation are keys to surviving and thriving. The problem is that when you become inconsistent with any of these seven methods, you are presented with a more significant challenge when it comes to self-assessment. For example, it’s much easier to analyze ourselves when we’ve kept our rules than when we’ve broken them or when we’ve traded consistent time frames and markets compared to trading randomly. 

If you want to grow into the kind of trader your potential suggests you should, give yourself a solid basis for feedback—the greater your consistency, the better precision you should have at identifying and remedying your growing edges. 

I’m convinced there is solid gold here for any of us if we take the time to perfect our habits that go behind (and beyond) our specific trades. However, once more, you must take this content and adopt it fluidly according to your own unique personality and methods.

Until next time, trade well!

Up next: How to Create Consistent Profitability in Your Trading