Your trading success is determined by your trading consistency
August 14, 2008
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John Forman - The Essentials of Trading author
Consistency is the key.
When I was coaching volleyball I was involved in a discussion with one of out players after her freshman year. She had had some very good match performances. She’d also had some real stinkers. It was clear to us coaches that she could be an outstanding player if she could just put forth a consistent effort from game to game. With some help she was able to do just that and had a fantastic sophomore year. She was selected 1st team All Conference and broke a few school records along the way.
Consistency is what took this young woman from being a talented player to being a star performer. Consistency is also what takes traders from having potential to being persistently sucessful.
It doesn’t take much to put in a good result now and then. Just about anyone can do that. There are loads of flash-in-the-pan types. We often consider them more lucky that good because they weren’t able to sustain their performance. They are not the folks taken seriously.
It’s the special ones who can generate good results on a regular basis. They do that by being consistent in their trading.
Granted, there needs to be something upon which to develop that consistency. The player noted above had the raw materials. She was of good size for her position, moved fairly well (when she wanted to), and had a pretty good head for the game. Obviously, some of that was inherent (can’t teach height), but other elements were ones she’d developed with practice, training, and experience over time. If that stuff wasn’t already in place all the consistency in the world wouldn’t have mattered.
The same is true of traders.
If one doesn’t understand the markets and their mechanics, have experience in trading and analysis, and the right kind of risk mentality - for example - then all the consistency in the world won’t matter a bit. Success would be more a matter of luck than skill. For the educated and experienced trader, however, it’s consistent application of what they know in the use of the skills playing toward their strengths (or at least away from their weaknesses) which makes the difference between a sometimes success and an all-the-time one.
Where does consistency come from? It comes from a well defined and executed plan.
In the case of the volleyball player the plan was partly one set out by the coaching staff in terms of practice and team training, as well as working specifically with her to identify areas where her game or strength/fitness could be improved. She also had additional elements of her own as part of the plan in terms of her summer training, diet, sleep, and pre-practice/match preparations. Both sides of the equation came together to make a full plan.
The same applies to traders. There are a number of different plan elements which must all come together to create consistency. They’re different for each trader, but include research, pre-/post-market analysis, keeping up with market developments, learning new techniques, etc.
If you’re trading isn’t where you want it, look first at whether you have the requisite know-how and experience and then at whether you’re being consistent - and if not, how you can make a change.
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