Trading consistently is more difficult than it looks.
One of the key reasons for this is that in real life, for the most part, we have routine and logic.
We get up. Eat breakfast. Get ready for work. Tend to the kids. Go to work and so on. It’s a routine that we could do with our eyes closed. Most of us often do!
Yet the markets are not so logical.
We'll follow a particular pattern with certain price points. They are projections. Not predictions. Thinking you can predict the markets is a losing battle.
The markets are a mass of emotionally charged people. All buying and selling for different reasons. Plus working from a vast array of time frames. From day traders focused on 1 minute and 2 minute tick charts. To longer term traders trying to latch onto multi month trends.
What all this means is that markets are being stretched and pulled in different directions on a daily basis. It’s the ebbing and flowing that can often see traders second guessing their strategy. Even worse, overriding it. Especially when markets back fill and your open profits start to dwindle.
In the real world, when something starts going wrong, we immediately try and fix it. Yet in trading, often the best action to take is no action. I’m not saying don’t exit bad trades. Yet there are basic premises worth taking on board when it comes to trading.
The first sounds easy yet is often overlooked. That is, don’t trade unless conditions are conducive to your method. The second is that when you are trading, don’t panic and micro-manage yourself out of perfectly executed trades.
There is nothing worse than exiting a trade too early because you hit the panic button on a back fill.
And yes you can execute the perfect trade yet still lose money. It’s hard to accept. Stick with it. It’s why most traders, especially those new to the game, flip and flop from new method to the next method. It's why most traders often give up and revert back to the real world of logic, routine and predictability.
At the end of the day, consistent trading equates to profitable trading. Yet being consistent in our actions is hard. Our brain is designed to keep us alive. As soon as our brains perceive something is going wrong, it goes into overdrive and tries to fix things.
The thing is, markets are always throwing out curve balls that give our brains the impression that something is going wrong. The key is to not seek constant action as a means to try and stay in control. This is where the battle is either won or lost.