Investology

Regaining Trading Consistency

Trading can be quite an unpredictable endeavor. Sometimes, traders can experience incredible gains for some time. But there are also times when they might experience considerable losses. Most may seem to notice that it is hard to achieve trading consistency for long periods of time. But there are also ways in which on may be able to regain it.

It is common for traders to experience up and down cycles many times. But when the loss cycle seems to be becoming quite longer than expected, it might be time to look into the situation more closely. Regaining trading consistency may depend on following these tips:

Reduce trading to break the disastrous cycle of losses.

One way to stop the cycle of extensive losses is by reducing the amount of trading drastically. This simple act can help reduce the amount of losses or drastically stop the downward cycle. Although the opportunities for gains will also be drastically reduced, that is not the current problem to really be concerned about. There is a need to stop the losses first before everything becomes totally and irreversibly lost.

Identify possible faults in the trading system used.

Once traders become at least successful in minimizing the losses by reducing the trading volume, it may now be time to take a closer look at the trading system. There might be certain faults that cause traders to lose instead of gain. The trading system might have been quite successful during a time of the bull market. Looking closely at the trading system might make some traders realize that what may have worked during the bull market may not work just as great during a bear market. In such cases, there might be a need to reconfigure or rethink the trading system used in order for it to be effective once more.

Trade only on areas that are working well.

When looking at the current trading system, traders may notice that there are some trades that are actually working well. In order to build on consistency little by little, traders should first try to focus on those trades that are actually working. The best way is to start with trading fixed positions first and then maintain it over a certain period of time.

Gradually build that sense of control and safety.

One reason why some traders fall into that long period of losses in their trades is because they sometimes lose their sense of control during trading. As the losses mount, it may be quite easy for traders to revert into emotional trading. This often leads to further losses since traders now tend to let their emotions cloud their decisions to trade better.

It is important therefore for traders to start building back their sense of control by first trading slowly and what works. Over time, they begin to regain their composure even when under pressure. They slowly learn to get hold of their emotions and not use it to cloud their trading decisions. As control improves, trading consistency usually follows.
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Tags: Consistency, Regaining, Trading