How to become a consistent trader?

First of all, the key to consistency and to being a consistent trader is having objective rules. They take the discretion out of the decisions. If A, B and C are true, you buy; and if D or E is true, you sell. Absolute rules where you don’t have to say, “Should I buy it? Shouldn’t I buy?” You should be able to know when to buy, sell, and do it almost blindfolded.

The second thing for consistency is testing those rules to have the confidence to keep following them. When you’ve done that as a trader, you can follow those rules repeatedly trade after trade.

There are a couple of steps to be consistent which starts with having objective rules. However, it comes down to building confidence in them through backtesting. When I talk about backtesting, I don’t mean looking at the charts and saying, “That would be a buy, and that would be a sell. There’s another buy, and there’s another sell.” That’s not what I’m talking about. I’m talking about putting your rules into backtesting software like Amibroker, and running those rules over 10 to 30 years of market history.

Hence, I’m getting thousands of trades over decades of market history across thousands of different stocks to test that entry and exit, and that position sizing method works. That’s what it takes to build consistency as a trader, and it takes some effort to do that. However, it’s far less effort than it is to blow up your account, then work your day job to save more money, start a new account, blow that account up, and then work your day job again to save up more money. Therefore, you can start, and after a couple of weeks of good solid training, you can be trading systematically consistently and never have to worry about destroying an account again because you know how to manage your risk, and you know how to trade consistently.

Links to Articles About Position Sizing

Explore more insights into position sizing and improve your trading consistency! Visit our detailed article on how to calculate position sizing for all the details.

• How To Calculate Position Sizing | What Is The Best Way?
• Profile of Van Tharp
• The Dangers of Martingale Position Sizing in Trading
• Position Sizing In Amibroker With SetPositionSize Function
• Master Risk Management for Traders: Proven Strategies to Protect Your Capital and Maximize Profits
• How to become a consistent trader?
• How can I overcome my fear of taking action when trading stocks?
• Trading Psychology | 4 Causes of trading stress and anxiety PLUS how to eliminate them
• Van Tharp – Outstanding Trading Books And Resources To Improve Your Performance
• 4 things you must do to survive stock market volatility
• Is it possible to mitigate huge potential losses?
• Kelly Criterion: The Smartest Way to Manage Risk & Maximize Profits