I heard from a trader over the weekend who has gone through a number of changes in recent months, both personally and in their trading.'' The result was a big lack of consistency in their trading.

This particular trader has endured a stretch of personal changes, including relationship stress, family changes, financial pressures tied to it, and a move.'' That’s a lot to take!

In terms of their trading, they went from being a retail trader to a prop trader and found some distinct, challenging differences which impacted their results (and trading process) adversely.'' It wasn’t that prop vs. retail was the issue, but rather this particular trader’s surprise and perhaps their lack of understanding of what those differences would be from the front end.

For example, this particular trader did not realize they would not be allowed to hold overnights at their firm.'' They got caught up in the ECN rebate game and started focusing on minimizing transaction costs rather than getting into and out of trades in a timely fashion.'' And there were several other issues they hadn’t fixated on previously (like platform fees).'' These changes added considerable pressure to the trader.

It left them asking me, how do you gain consistency in trading?'' They asked me specifically “what got you over the hump to consistent profits in your trading?”

Here was my response…

Sounds like you have been through a ton, and I’m sure you’re drained emotionally as a result. Once the dust settles for you though, your self-honesty will serve you quite well as you get back on a track that’s right for you.

In terms of what I did to achieve consistency, I had been making money part-time before going full-time.'' When I made the switch from part-time to full-time, there was a period of about 2 months in between where I was assisting another experienced full-time trader by placing orders for him and helping manage his account. This was due to a very different style of trading (managing many positions simultaneously), and it was new software, so I needed to get accustomed to it. Once I was comfortable with it, I went live, and from my first day I was profitable.

A year or two later, I went through a tough stretch and got really frustrated. The way I responded actually led to my longest streak of consecutive profitable months, and it was all due to one single commitment: limit losses. By taking little paper cuts, I got out of bad trades with minor damage but kept finding winners along the way too (it’s a numbers game), and that just created a ton of consistency for me.

I think if you can simplify the effects of what’s taking place personally with you, then your trading will be calmer as well. Life goes on, and periodically it gets hectic in a way that’s not under our control, but if you detect that then just get more passive with your trading. When personal things are clear and you’re more focused on the market, you can get more aggressive with your trading.'' Becoming consistently profitable goes hand-in-hand with taking a long-haul approach for consistency over time.

Trade Like a Bandit!

Jeff White