Our Journey towards Forex Trading Consistency
by Zahir Shah
Many of us are familiar with, or fond of using the phrase; “fail to plan, then plan to fail.” It’s important to stress just how essential it is to not only plan each step and trade we take in the market, but just how critical it is that we create a disciplined framework and template, from day one, in order to give ourselves the best chance of success.
In conversations with experienced traders, who’ve managed to last the course, but who can recount their early failings, they’ll often point to the multitude of mistakes they made early on in their fledgling careers. They’ll also point to the lack of advice they received, regarding discipline and self-control, which created a lack of direction, this in turn caused them to lose money unnecessarily.
Many will cite that with only the smallest, most obvious and simple adjustments, they could have eradicated bad form, which would have then become habits and put them on the right trading track, leading to success arriving much earlier in their careers. Without putting the right plan in place, for each any every trade or adjustment we make in the marketplace, it becomes impossible to build consistency with our trading. We can’t possibly build a career, or our account up, until we understand what consistency is and how to achieve it.
What is consistency, in terms of trading?
Steadiness, constancy, stability, uniformity, regularity, dependability, reliability, orderly and unity, these are just some of the other single words that can be used as an alternative definition, or meaning of consistency.
Our consistency could begin with basics such as having basic routines; checking economic calendars for upcoming high impact events. As an example; experienced traders might consider tightening their stops around such events if they’re already in the market. Day traders may choose to stay out of the market during such events, others may actively look to trade such events. However, success will be determined by us having a plan for and planning around such events, in a consistent manner.
Other wider consistency issues may involve: the sessions we trade, the markets we trade and the securities we trade, and many of these elements will be embedded in our trading plans. For example; we may decide to only trade the London/European open from approx. 8:00am GMT until the New York open, we may only trade the New York session. We may consistently only trade EUR/USD and never hold trades overnight.
Naturally, consistency and discipline are related concepts were trading is concerned. Our consistency and discipline could also be translated as predictable, even somewhat boring at times and in such a complex and potentially highly stressful business such as retail trading, any opportunity you have to become: predictable, robotic and boring should be embraced. The vast majority of successful traders will confirm that their trading is monotonous, repetitive and in some ways boring. That’s not to suggest they’ve lost interest in trading, they’ve simply reached a destination whereby they’re entirely comfortable with their trading. They look for certainty, precision and predictability in what can be a highly unpredictable industry and activity. Most successful traders repeat the same tasks over: days, weeks, months and years. They’ve developed their edge, they’ve obtained the skill knowledge and crucially the experience to know it works and they simply repeat their consistent processes every day the market is open.
Basic ideas have been taken from Investopedia, FXCC Blog and Fxacademy