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What Does It Take To Become A Consistently Profitable Trader?

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What Does It Take To Become A Consistently Profitable Trader?

hey hey what’s up my friend so in today’s episode I want to talk about what does it take to become a consistently profitable trader because here’s the thing right anybody can be a profitable trader you could make you know 50% in a given month you could make $500 a day in a short run anybody any Tom Dick Harry Sally Mary can make money in the markets so another question is what does it take to be a consistently profitable trader because there is a huge difference being a profitable trader and a consistently profitable trader so number one you must have an itch in markets so what do I mean by having an itch because she is sitting right even without an itch in a short run you could actually be a profitable trader for example if you go down to the nearest casino you know that the house I always have an edge over the players it is statistically proven right that a casino have the odds with them but you can go down to a casino for a day a week you might actually come up net profitable even though you’re trading without a niche and it’s the same for trading so if you want to be consistently profitable in the long run then you must have a niche in the markets just like the casino in the long run they make money because they have an edge over the players so an agent is simply expectancy right give you a layman term right an example is let’s say you have a coin every time it comes up here you make $2 every time it comes up till you lose $1 so clearly their coin toss right you have an H in it coin toss it gives you a positive expectancy so that is what I mean by having an itch number two you must know what consistency means so many traders right you know me included when I first started in trading I thought I know being a consistent trader it means you know you could make money every day every week and I realized that debt is it the reality there isn’t a one-size-fits-all because consistency depends on one very important factor and that is your frequency of traits how often can you trade within that specific period of time again let me give you an example let’s say that same coin toss alright every time it comes up we hit you make two dollars every time it comes up till you lose a dollar let’s say you can only toss that coin once day now let me ask you what are the odds of you making money every single day from the coin toss I’m sure you agree that some days you’ll make money some days you’ll lose money but in the long run you will make money but when we are talking about consistency making money every day from the coin toss you agree that you won’t make money every day because you can only toss the coin once per day but what if you can now toss that coin a thousand times a day now what are the odds of you making money every single day no I’m sure you can see that the dynamics have shifted now the odds of you making money every single day if you can toss that coin a thousand times a day is dramatically higher I think you could make money on almost every day I would say a hundred percent one 99.

9999% right you will make money on most days so can you see the difference that you might have similar expectancy for your trading system but your frequency of traits is what determines how consistent you will be as a trader so you’ve got to manage the expectations so if you’re a trader that picks you know one trader did and clearly you don’t expect to make money every day if you are triggered that picks you know one trait a week then clearly you need even more time right for your age to player so a very rough general guideline is this if you can take a hundred traits let’s say we know within a month then generally you can make money on most months if you can take hundred traits right assuming the idea for each in the markets assuming that your trading system has a positive expectancy if you can take a hundred traits let’s say within every six months then generally every six months right you will make money and again if you can take hundred traits let’s say every year generally on most years you will make money okay so manage your expectations right consistency is not what you think moving on number three being a consistently profitable trader is also about handling your drawdown right here’s the thing right no trading strategy no trading system no whatsoever are there works all the time why is that because the market changes all the time the market is not static it goes up it goes down it goes into arrange a low-volatility environment etc and this means right there whatever trading system that you are using it will have winning periods and losing periods no doubt about it so the key here is how do you handle the losing periods how do you handle your drawdown so this largely depends on your trading methodology for systems trader what you can do is you can use the filter right to know when to stay in the markets and when to stay out of the markets for example let’s say you trade stocks and you know you usually make money in a bull market in a bear market you don’t make money so how you gonna actually handle the drawdown is that maybe he let’s see if the market is in a bear market in a recession you stay out of your trading you stop trading the system it’s one way for discretionary trader maybe you’re a price action trader how do you handle the drawdown well one way is to understand how the market conditions have changed and how can you adapt your trading strategy accordingly let’s say you know previously you are making money you know buying uptrend non market has changed right you seem to be losing money whenever you’re buying the dips maybe you may have to pause reassess and consider you’re selling into rallies maybe the market condition have shift to a downtrend so that’s where this questionary trader could adjust their trading methodology so this is how you handle your drawdown right and what you know consistent traders they would you know definitely be prepared for and finally number four consistently profitable trader they understand and they embrace that anything can happen in the markets any professional traders will agree with that statement it’s only new traders are who are cocksure that of the earth trading opportunity of their trade setup and that’s when you go all-in and when you go all-in and when something doesn’t happen the way you expect it that’s where you lose everything and more so consistently profitable trader they know anything can happen no matter how good a trading setup looks no matter how good the pattern looks how accurate the system is they know that there’s always a possibility of them losing money there’s always a possibility of them you know losing more than intended that’s why they always respect markets they have proper risk management because anything can happen in the markets okay so with that saying right I was saying these are four critical things right on what it takes to become a consistently profitable trader number one having a niche number two right knowing what consistency means number three able to handle drawdown and number four knowing that anything can happen in the markets so that’s it I’ve come towards the end of today’s episode and I will talk to you soon you

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