With today’s market, how are you handling your trading?

The uncertainty is uncomfortable.

Some feel that the devil they know is better than the one they don’t know.

What are your options in these markets?

1.     Know your Personal Risk Profile (PRP) 

This is about knowing who you are and how you react under different market conditions. It is about finding out if your PRP matches the strategies that you have in place.

2.     Lessen your Input

These days, everybody is talking about the markets and how it is impacting their lives. Limit the amount of your conversations and filter the information you are hearing or reading.

There is a quote by Warren Buffett that “A public-opinion poll is no substitute for thought.” 

3.     Manage your Expectation

Frustration comes when we have unmet expectations. We assume that we should have a crystal ball and know what is going to happen. Worse, we think, “How come markets do these things to us?”

The truth of the matter is that the markets are neutral and they do not care. It is about us and what our expectations of the markets are.

Epictetus has a saying: “We are not troubled by things themselves, but by our thoughts about them.”

4.     Be Flexible

When you notice the market changes, ask yourself if the assumptions that you entered the trade, are still valid. If they aren’t, then get out of the trade. 

When you do, you give yourself a chance to think clearly and come from a more objective place.

James Dean says, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.”

5.     Manage your Energy

Where is your focus? Are you focusing on the challenges or on the solutions? Do the activities that you are involved in energize you or drain you?

Who are the people around you? Do you feel more inspired or discouraged after spending time with them?

If you don’t mange your energy and set boundaries, others will do it for you.

Charles Darwin says, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Here is to making trading success your habit™,

How many times have you heard that one of the keys to trading success is consistency?

Probably too many times. Well, it is true.

How do you define trading consistency? What are the elements of it?

I have come up with the five C’s of trading consistency, which are:

1.     Clarity

The first C of trading consistency is clarity. This is one of the most important elements.

When we are not clear about why we are trading and our trading plan, we jump from one thing to another. Our actions are not focused. As a result, things take longer and we do not produce consistent profits.

With clarity comes focus. When we have focus, we have more profitable trades.

2.     Commitment

The second C of trading consistency is commitment. I know this is stating the obvious. Find out how committed you are by answering the following questions.

When you are trading:

• What are you willing to do?
• What are you willing to give up?
• What do you do when things are not comfortable?
• What do you do when things are not convenient?
• What boundaries are you willing to set?

3.     Courage

The third C of trading consistency is courage. Let me ask you a question. Have you had occasions that you know what you need to do and yet you don’t do it?

The action might not be comfortable for you, or it might not be at the right time. Do you have the courage to take the action anyway?

This is where clarity comes into place. Knowing why you are doing something allows you to handle challenges that come in your way.

When I talk to some traders, they tell me because of lack of capital, they do not follow all the signals that their system gives them. They start picking and choosing. Then they have more losses than they care to. Then they lose more capital and this vicious cycle continues.

4.     Confidence

The fourth C of trading consistency is confidence. You might know what to do and you don’t have the confidence to take the action. You might not believe that you can do it.

This is where courage comes into place. There are times that you might not fully believe you can do it.  At these times, when you have courage to take action, you are one step closer to getting the results that you want.

By not taking action, you are guaranteed of not getting any results, both positive and negative.

I remember meeting a person who wanted to trade. However, he was afraid of losing even a penny. In addition, his wife was scared of losing money. As a result, after studying trading for over a year and a half he had not pulled the trigger yet.

A lot of times, we do not want to fail. So we do not take any action!!!

5.     Calmness

The fifth C of trading consistency is calmness.

How do you handle adversity? What do you do when the markets go against you? Do you get angry and defensive or do you stay calm and play offensive?

When the markets go against you, do you overtrade? Do you try to make all of your losses in one deal? Or do you stay calm, take a breather and reevaluate the market?

When our emotions go up, our intelligence comes down. We make bad decisions. We take it personally. Then we start doubting ourselves and we start losing confidence. Then we start losing more and more…

When we stay calm, we can evaluate the market from an objective place. We can see the market for what it is and not what we want it to be. Then we can take a calculated risk.

Consistency is most difficult and most readily proven during tough times. How someone weathers the storms demonstrates their skills.

Here is to making trading success your habit™,

Trading is about probability and not control. However, most people want to control the outcome.

Don’t get me wrong, when we trade, we trade with the intention of winning. However, when you realize it is about probability and nothing is guaranteed, then it is easier to detach yourself from the results and be free to notice how the market is behaving and adjust your positions accordingly.

I don’t know if you have seen the movie “Kung Fu Panda” or not. In any case, this reminds me of the following conversation:

When you are not under the illusion of control, you are in the zone and you can be in flow with the markets and get the results that best suit you.

Here is to making success your habit….