{"id":4054,"date":"2020-09-02T18:43:32","date_gmt":"2020-09-02T10:43:32","guid":{"rendered":"https:\/\/www.investagrams.com\/daily\/?p=4054"},"modified":"2020-09-02T20:52:17","modified_gmt":"2020-09-02T12:52:17","slug":"how-to-fast-track-your-trading-journey-towards-consistent-profitability","status":"publish","type":"post","link":"https:\/\/www.investagrams.com\/daily\/2020\/09\/how-to-fast-track-your-trading-journey-towards-consistent-profitability\/","title":{"rendered":"How to Fast-Track Your Trading Journey Towards Consistent Profitability"},"content":{"rendered":"

Most people go into trading because of the profits it may bring.<\/span><\/p>\n

But as your beginner’s luck runs out and starts heading into a losing streak\u2026<\/span><\/p>\n

You start spiraling into a state of frustration and confusion, craving for a strategy that can produce all the profits you ever wanted.<\/span><\/p>\n

In the end, you ask yourself\u2026<\/span><\/p>\n

\u201cCan I succeed in this trading business?”<\/span><\/p>\n

\u201cIs everything that I\u2019ve done worth it?\u201d<\/span><\/p>\n

Well\u2026<\/span><\/p>\n

\"\"<\/p>\n

Now, you might think that succeeding in trading is a hill you can never climb.<\/span><\/p>\n

But what the statistics don\u2019t tell you is that not all of those who failed are quitters.<\/span><\/p>\n

That\u2019s why in the next 5 minutes\u2026<\/span><\/p>\n

I am going to share with you 5 essential characteristics you must operate into to fast-track your progress towards the 24% of profitable traders.<\/span><\/p>\n

Let\u2019s get started!<\/span><\/p>\n

1. You Must Take Responsibility<\/strong><\/h3>\n

Refusing to take responsibility for your trading decisions and beliefs means that you are giving up the power to change.<\/span><\/p>\n

When you give up the power to change, you lose the ability to change your results.<\/span><\/p>\n

So, if you wish to make that first step of taking responsibility, the first thing you should do is to\u2026<\/span><\/p>\n

Control your initial response to a situation<\/b><\/p>\n

Instead of embracing the problem at first thought, find, and embrace solutions.<\/span><\/p>\n

Let\u2019s say you have a stock that moved +50% without you.<\/span><\/p>\n

Your initial response would probably something like\u2026<\/span><\/p>\n

\u201cI shouldn\u2019t have followed that group admin\u2019s stock tip!\u201d<\/span><\/p>\n

\u201cIt\u2019s my broker\u2019s fault, s*#@!\u201d<\/span><\/p>\n

Instead, exercise proper breathing first and ask yourself\u2026<\/span><\/p>\n

\u201cHow can I re-enter this market without breaking my rules?\u201d<\/span><\/p>\n

\u201cIs this stock still worth being on my watch list?\u201d\u00a0<\/span><\/p>\n

See the difference?<\/span><\/p>\n

Now, I know how painful it is to miss trading opportunities\u2026<\/span><\/p>\n

But controlling your initial response to a situation not only saves your trading capital but your mental capital as well.<\/span><\/p>\n

Read on\u2026<\/span><\/p>\n

2.\u00a0You Must Think Independently\u00a0<\/strong><\/h3>\n

Dependent traders crave the opinions of others on whether they should enter or exit a trade.<\/span><\/p>\n

If trading without a plan is already disastrous, what more if you let others define how your plan should be!<\/span><\/p>\n

Always remember that the only best stock trading strategy out there is the best one for you.<\/span><\/p>\n

So to give you perspective\u2026<\/span><\/p>\n

There are a lot of profitable trading strategies that work differently<\/b><\/p>\n

Looking at the chart, losing 80% of the time will still net you profit in the end if you get rewarded 5 times your initial risk on winning trades:<\/span><\/p>\n

\"\"<\/strong><\/p>\n

Of course, I\u2019m not telling you to lose 80% of the time, but looking at the chart\u2026<\/span><\/p>\n

You must determine whether or not you are the kind of trader who is:<\/span><\/p>\n

    \n
  1. comfortable winning more trades but offer fewer rewards (high win rate, low risk to reward)<\/span><\/li>\n
  2. more patient in achieving bigger rewards but can handle losing streaks (low win rate, high risk to reward)<\/span><\/li>\n<\/ol>\n

    Choosing A or B is something only you must choose, so never let anybody define how you should trade.<\/span><\/p>\n

    Own your process!<\/span><\/p>\n

    Got it?<\/span><\/p>\n

    Then let\u2019s move on\u2026<\/span><\/p>\n

    3.\u00a0You Must Know Your Stock Trading Strategy Intimately<\/strong><\/h3>\n

    One of the things that hold people back to become a profitable trader is when they have unrealistic expectations of the strategy they are using.<\/span><\/p>\n

    So, here\u2019s an example of a systematic stock trading strategy backtested from 1990 to 2018:<\/span><\/p>\n

    Number of trades:<\/b> 710<\/span><\/p>\n

    Winning rate: <\/b>48.5%<\/span><\/p>\n

    Average Annual Return: <\/b>12.77%<\/span><\/p>\n

    Maximum drawdown: <\/b>41.73%<\/span><\/p>\n

    \"\"<\/strong><\/p>\n

    Source: <\/span>TradingwithRayner<\/span><\/a><\/p>\n

    There are better systems out there, but this system beats the 32-year average annual return of the PSEi which is <\/span>7.50%<\/span><\/a>\u00a0<\/span><\/p>\n

    Now, the first thing to analyze is\u2026<\/span><\/p>\n

    The strength and weakness of your strategy<\/b><\/p>\n

    Not only you should know when your strategy works, but also when it doesn\u2019t work.<\/span><\/p>\n

    As you can see, this market thrives on long-term trends and lost only 5 out of the 28 years the strategy has been tested.<\/span><\/p>\n

    However, you must take note that this strategy does not work well on Financial Crises:<\/span><\/p>\n

    \"\"<\/p>\n

    The next thing you must identify is\u2026<\/span><\/p>\n

    The worst-case scenario of your strategy<\/b><\/p>\n

    Now, what would you\u2019ve done if you have experienced a <\/span>4-6 month <\/b>losing streak?<\/span><\/p>\n

    \"\"<\/p>\n

    Or lose 22.6% of capital in just a month?<\/span><\/p>\n

    \"\"<\/p>\n

    Would you start tweaking your indicator settings, add new indicators, or pull out your capital and hop into a new system just because you are not \u201csatisfied\u201d with the results?<\/span><\/p>\n

    A worse-cast scenario is never easy to accept, but identifying it plays a crucial part in choosing a strategy<\/span><\/p>\n

    If you do not have the conviction to stick with your system through hard times, then you won\u2019t thrive long enough to experience consistent returns:\u00a0<\/span><\/p>\n

    \"\"<\/p>\n

    So, the next time you encounter a strategy that promises huge returns\u2026<\/span><\/p>\n

    Always determine what its maximum risk and average reward are, and think independently whether or not you can accept the risk, reward, and the concept of the strategy.<\/span><\/p>\n

    Next\u2026<\/span><\/p>\n

    4. You Must Execute Consistently<\/strong><\/h3>\n

    As a human being, you will miss some trading opportunities and miss checking your charts.<\/span><\/p>\n

    This is why you must develop not only habits but a system to put your habits into action consistently.<\/span><\/p>\n

    So, what you must do is to\u2026<\/span><\/p>\n

    Have a trading routine<\/b><\/p>\n

    One thing you must know first is that your trading business by any means should not damage your relationships or hinder other responsibilities<\/span><\/p>\n

    Overall, your trading routine should <\/span>at least<\/span> have the following:<\/span><\/p>\n