2023 US Investing Championship - Top Performer | Sharing ideas, charts, and the philosophy behind trading | Official Profile - Blue Check
"How can I achieve consistency in my trading?"
This is the question I got from my last free call out of the 50, yesterday. Here is my answer :
The term "consistency" has been used so often that, due to overuse, we sometimes forget what it truly means. Consistency is not just about having only positive monthly gains and triple digit years.
Consistencyfor me is, receiving feedback around the average of your established goals and continuing to operate in the same way to create a pattern of similar feedback in the long run.
To achieve consistency, you need 3 things:
1. A Complete and Efficient Foundation
2. Proof that enables you to trust the system and build rules around it
3. A clear understanding of what is normal to expect, so you can follow those rules.
A solid foundation, clear rules, and not deviating from them—this is what drives consistency
So, why is it so hard to reach consistency in trading? The answer is that each of these three elements requires a tremendous amount of effort compared to other fields.
Fitness:
1.Complete and efficient workout and diet systems are easily accessible.
2. You have proof all around you even from your close circle that these systems work, and you can build rules based on them.
3.Everything is quantifiable. You know for examplethat 3,500 calories equals one pound of fat. You know what to expect and the timelines. Feedback is generally positive as long as you follow the rules. It's easy to obey the rules you've set and maintain the right mindset.
Trading:
1. It’s far from easy to find a complete and efficient foundation. Sometimes when starting out people don’t even know what parts are needed for a complete foundation. And even if it is complete it does not mean that it is efficient.
2. Proof? Everything seems chaotic. The people who succeed are a small fraction of participants, and that doesn’t inspire immediate trust. A trading system has so many components that it takes enormous effort to gradually eliminate doubts and answer all the "whys" from the ground up. This makes it hard to create a solid rule set to complement the entire foundation.
3. Even if you have a foundation and a set of rules, many don't know what to expect, what the foundation's capacity is, or what feedback is normal and what isn’t. Small negative feedback, which could be fully normal based on the foundation can lead to constantly breaking the very rules you’ve set.
To achieve consistency in trading,
1. You need a complete and efficient system.
2. You must eliminate all doubts about each part of the system with actual proof, so you can fully trust it and set the rules you need to follow.
3. You need to develop an understanding of what I often refer to as the "expectancy of outcomes," so you know the capacities of your system and what's normal feedback and what is not. This is the only way to ensure you respect those rules and trade near the mean of your optimal mindset.
Following these three steps can lead you to your goals. Will it require time and effort? Yes... it may feel like blood, sweat, and tears.
But at least now you know what consistency really means and what it takes to achieve it.
The rewards that come after struggle are always greater!
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