What brings the consistent profits in trading?
Talking to hundreds of struggling traders from different parts of the globe, I realized that there are the common misconceptions concerning that subject.
In this educational article, we will discuss what really will make you profitable in trading.
🔔The first thing that 99% of struggling traders are looking for is signals.
Why damn learn if you can simply follow the trades of a pro trader and make money?!
The truth is, however, is that in order to repeat the performance of a signal provider you have to open all your trading positions in the same exact moment he does. (And I would not even mention the fact that there will be a delay between the moment the provider opens the trade and the moment he sends you the signal)
Because the signal can be sent at a random moment, quite often it will take time for you to reach your trading terminal and open the position.
Just a 1-minute delay may dramatically change the risk to reward ration of the trade and, hence, the final result.
🤖The second thing that really attracts the struggling traders is trading robots (EA). The systems that trade automatically and aimed to generate consistent profits.
You simply start the program and wait for the money.
The main problem with EA is the fact that it requires constant monitoring. It can stop or freeze in a random moment and may require a reboot.
Moreover, due to changing market conditions, the EA should be regularly updated. Without the updates, at some moment it may blow your account.
Trading robot is the work: trading with the robots means their constant development, monitoring and improvement. And that work requires a high level of experience: both in coding and in trading.
📈The third thing that struggling traders are seeking is the "magic" indicator. The one that will accurately identify the safe points to buy and sell. You add the indicator on the chart, and you simply wait for the signal to open the trade.
The fact is that magic indicators do not exist. Indicator is the tool that can be applied as the extra confirmation. It should be applied strictly in a combination with something else, and its proper application requires a high level of expertise in trading.
🍀The fourth thing that newbie traders seek is luck. They open the trade, and then they pray the God, Powell, Fed or someone else to move the market in their favor.
And yes, occasionally, luck will be on your side. But relying on luck on a long-term basis, you are doomed to fail.
But what will make you profitable then?
What is the secret ingredient.
Remember, that secret ingredient does not exist.
In order to become a consistently profitable traders, you should rely on 4 crucial elements: trading plan, risk management, discipline and correct mindset.
🧠What is correct mindset in trading?
It simply means setting REALISTIC goals and having REALISTIC expectations from the market and from your trading.
📝A trading plan is the set of rules and conditions that you apply for the search of a trading setup and the management of the opened position.
Trading plan will be considered to be good if it is back tested on historical data and then tested on demo account for at least 3 consequent months.
✔️In order to follow the plan consistently, you need to be disciplined. You should be prepared for losing streaks, and you should be strong enough to not break once your trading account will be in a drawdown.
💰Risk management is one of the most important elements of your trading plan. It defines your risk per trade and your set of actions in case of losses. Even the best trading strategies may fail because of poor risk management.
Combining these 4 elements, you will become a consistently profitable trader. Remember, that there is no easy way, no shortcut. Trading is a hard work to be done.
