In the Blackwatch Advisory, one of the behaviors that I try to instill in my students, to help them become profitable traders, is consistency. If you're trying to make a long term career out of forex or futures trading, you have to be consistent in all areas.

I’m talking about building consistency in your trading habits and execution of your trading strategy that you follow day in, and day out. Today, I’m going to talk about why consistency is so important and talk about some of the most important habits you need to form to make it as a professional trader.

Why Consistency in Day Trading is Crucial

Something you'll quickly learn is that consistency is that it’s the foundation on which all successful traders build their careers, without exception. 

What it comes down to is that consistent actions produce consistent results, as opposed to a trader who is all over the place, over-optimizing their strategy, deviating, and not pulling consistent profits as a result of their disorganization and lack of discipline.

The Role of Discipline in Long-Term Success

To be a consistent trader, you absolutely need to build up your discipline. Discipline in trading means avoiding any kind of emotional or erratic behavior. Discipline is about sticking to your predetermined trading strategy and plan.

By being disciplined and sticking to your plan, you reduce the chances of entering trades in a reactionary way and allowing your emotions to impact your decision-making in the process.

Discipline means always sticking to your plan, keeping risk management in mind, and avoiding any kind of impulsive actions at all costs. Discipline ultimately is easier to build and maintain if you have a good quality, proven trading strategy that you really believe in. That’s why it’s important to select a trading strategy that has been proven in the long run to produce profitable traders.

Crucial Habits for Building Consistency as a Day Trader

In order to become a more profitable and more consistent trader, there are a few habits that are worth developing. Inconsistency stems from things like strategy hopping, neglecting the fundamentals of risk management, and constantly tweaking or over-refining a strategy because it isn’t producing enough profit on a trade-by-trade or day-by-day basis.

Following a Single Day Trading Plan

In my forex and futures trading course, I teach a very simple and clear cut, easy to follow trading strategy that I trade personally in 2 different markets. A proven-to-work trading plan/strategy provides you with the rules for analyzing, entering, managing, and exiting positions in the market. If you have a super clear plan that covers all of that, half the battle is over.

By sticking to a trading plan, you can ignore market noise and prevent yourself from making impulsive trades. You’ll also know when to hit trades when they come with little to no hesitation because you trust in the trading strategy.

It’s about having a well defined, structured approach to trading that doesn’t allow you to deviate even if market conditions are seemingly irrational or unpredictable. By sticking to your trading plan, you can remain objective and keeping your emotions out of it becomes a cakewalk.

Risk Management and Position Sizing

Another crucial but obvious habit is maintaining good risk management. A rule of thumb when trading is that you should never risk more than 1% of your prop trading account on an individual trade, with 2% being the absolute maximum for smaller personal accounts. 

While this isn’t the easiest thing to calculate on the fly when trading futures contracts, I still highly recommend defining your risk before entering a trade so you aren’t in a situation where you’re eating losses bigger than you intend to if a trade idea goes against you.

By being conservative, you can ensure that even if a trade goes south, you don't lose a substantial amount of money, or worse, blow a prop firm trading account that you worked so hard to get funded with.

On that note, taking proper position sizes is essential for managing risk as well. With correct position sizes, you can limit potential losses while also maximizing your ability to make profits. 

With proper position sizing and strict risk management, you can prevent large and unexpected losses from occurring, meaning you can endure bigger losing streaks if they come, which will happen to almost any trader, experienced or not.

Building Emotional Discipline

If you expect to be a consistent trader, you need to keep your emotions in check. Emotional discipline is one of the hardest aspects of trading to master, especially if you’re trading a strategy that doesn’t have any edge in the market, so ensure you pick a strategy that is sound first before delving into the following points.

Controlling Emotions During Trading

If you start making decisions based on your emotions rather than your strategy and basic logic, then you've already lost the game. Things like nursing your trades too much (gluing your eyes to the screen when in a trade can lead to over management and becoming overly emotional about it.

Staying calm and confident, regardless of the outcome of any specific trade, will help you be more consistent. It’s that simple. By detaching yourself from the outcome, it allows you to stick to your trading plan and keep trading the same way without switching things around every time you take a loss.

Reviewing Your Trades as a Day Trader

The other habit that you should develop to be a more consistent trader is reviewing your trades after every session to make sure you’re actually sticking to the strategy, or to identify if you’re deviating from it.

Always Keep a Trading Journal

This one is simple, track your trades in a journal. Once your positions are closed, whether the trades were winners or losers, go back and review them to see whether or not those trades fit the strategy/plan. If they didn’t figure out why. If they did, great. Pat yourself on the back.

Conclusion

If you can maintain a high level of consistency throughout your trading, you'll undoubtedly be more profitable and successful. Just like a professional athlete builds proficiency in their sport by executing their technique with good consistency, you will build your proficiency as a trader by executing your trading plan with good consistency.

That’s it for today guys,
Brian