The Wealthy Trader's Guide to Consistently Profitable Trading

Are you finding that your trading results are not as consistent as you want? Are you wanting to confidently repeat when you hit winners? Of course! Goal #1 in trading is profits. Goal #2 is then making money consistently. Goal #3 is steadily increasing profits.

Your trading profits are primarily controlled by what YOU do, more so than what the markets do. There are traders making money every day, so pointing your finger at the markets is simply an excuse. If you want to profit consistently, then get more consistent in what you do in your trading.

A good starting point is to understand is that trading is a repeated activity. That's why making use of a good trading system is so vital. If you truly desire to make improvements in a process, and particularly when your objective is achieve greater consistency, the three steps below are ones you can take to have the most substantial impact on your consistency.

Step 1. Clearly define and document your system. One of the biggest mistakes that many traders make, especially when it comes to consistency is that they don't take the time to make sure their system is well-defined and written down.

If you often engage in an procedure that isn't written down, there will probably be inconsistencies in how things are done. That is why the military is so big on procedures: they want things to be done in a uniform, reliable and predictable manner. The same is true for your trading.

Step 2. Measure your system's critical aspects. A smart person once stated that in order to improve anything, you have to start with first measuring it. In what other way are you to know if you're actually improving? Your trading system has several calculable aspects that determine your bottom line, along with the all-important profit/loss number at the end of the month.

Businesses in all industries have certain aspects that determine the profitability of the business. Savvy business owners know to monitor those aspects and assign metrics to them. The reason that these are so important is because through a calculated analysis of these factors, you can then see specifically where your opportunities for improving your system are.

Step 3. Tweak your system through meticulous actions. Once you have an analysis of your system, you now have the ability to focus on those particular aspects of your system to make improvements. By utilizing system analysis, you can modify your system and test - without risking money - either through back-testing or in a demo account and see if the change improves or hurts the system's performance - in the specific area you seek.

To give you example, let's say you run the metrics on your system and your results show that your winning percentage is currently 48%. You come up with an idea on how to improve it to 55%, which you "think" would increase your profits at the end of the month. You then run the analysis on your newly modified system on real market data. Evaluating the results, you can see if this change accomplished it objective, but also if there were trade-offs in other aspects of your system performance, such as a lower profit-to-loss ratio. You then can make a educated decision on whether you should stick with your current system or go with the change.

Summary. In your trading, you wish to have consistent - and reliable - results. Trading your system is an activity that you do regularly, so if you want consistent results, focus on making what you do consistent.

Step 1 is to make sure that your system is defined and written down. By clarifying your system and then writing it down, you improve your likelihood to repeat what you do consistently.

Step 2 is to measure your system to establish where you are now versus your desired goal. This also gives you insight into where to focus for improvement.

Step 3 is to track these measurables and make improvements in a controlled fashion and keeping your risk very controlled.

There are a handful of metrics in your trading business that have substantial impact on your bottom line. Through analyzing your system's performance and purposefully focusing on these measurables, you give yourself the quickest way to increase your profits. Also, this will dramatically improve your ability to consistently produce profits.