Consistency for your trading plan
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Thread: Consistency for your trading plan

  1. #1
    Trader ara's Avatar
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    Consistency for your trading plan

    I put this thread here because it is part of Beginners guide. You find a lot of materials in this forum related to forex trading, of course it can be a library for you to learn more and more. I'm sure nothing is useless here, but if you think so then just absorb what is useful, discard what is useless and add what is specifically your own. It's so simple.

    As long as the market moves up and down, then it's fruit for you. How did it happen? Of course you should be able to DANCE IN THE MARKET. What the??? How to?? YES..., TRUST ME.., You can DANCE..., although you can't dance in the market, trust me you can dance ballet, tango, samba, or belly dance, or something else. But, really very surprising why in the world of forex trading where the comparison of win and lose is 50:50 almost 90% of people in it always fail. Though only need to determine buy or sell when will enter into trading position. Why it happened there was one thing in common between these people. Ie inconsistent in carrying out trading systems and unplanned trading activities.

    All things unplanned will lead to chaos in this case margin call or stop out. Not having money management in trading causes the trader to become a true gambler. A good trading plan will make our account can continuously survive and growth, we will also be able to read and also analyze the location of the error of our trading techniques. Without any trading plan we will not be able to make improvements to the trading system and the perfection of the trading system that we used will never be achieved.

    Examples of cases one form of improvement of trading system:
    There is a trader. After 10 trading days turns out the system that he uses is always lost. Though he always apply his trading plan in a disciplined and consistent. But the resulting consistent instead lose.

    If there is a case like this, if his trading didn't noted it will be difficult to evaluation or improvement. Maybe even he will change the trading system he uses with other trading systems. And when he realizes he has found a very good trading system. And when he realizes that in fact he has used a very good trading system.

    What the? why good ?? someone must be wondering. Is not the system he used always lose? Of course all trading systems have advantages and disadvantages, I can't remember how many times I say this in this forum, which obviously I often say this. That's why we should find and learn the advantages and disadvantages of our trading system, having a trading journal is a way to develop a trading system that we use, you should do a forward test to get a data of your trading history by using your trading system and evaluate it, do it again and again till you can make your trading system become profitable. Or at least, we can do back test if we are lazy to do forward test.

    Development of a trading system by a trader can only be done because he is consistent with the system he uses so he can make improvements to the system he has.

    Trading is a matter of probability but many beginner and middle-class traders do not have consistency in their trading system. In this thread I will first emphasize on the consistency of usage of trading techniques. Consistent I mean here is not changing the trading system used. But beginner traders often ignore this, when he trades with 1 technique when he suffers a successive loss and then he will change to another trading system.

    For example, let's say we already have backtest or forward test data for our trading strategy. So we know that the wining rate of our trading strategy is 70%. (How to do a proper back test/ forward test? just find it here.)

    Then he do a real trading, the result is: (let's say the result in his real trading is same with the data of test)

    1st trade : Profit
    2nd trade : Profit
    3rd trade : Loss
    4th trade : Loss
    5th trade : Loss

    (in this condition usually beginner traders will start "upset" and change this trading strategy to other trading strategy)

    So he will back to zero again and again, changing and changing again his trading strategy. He stuck on this phase for years.

    Conditions will be different if he is consistent in his trading strategy. let's say that he didn't change his trading strategy to other strategies.

    6th trade : Profit
    7th trade : Profit
    8th trade : Profit
    9th trade : Profit
    10th trade : Profit

    This is because the probability of the system is not so on win. Or even in 100 trading times, it could be the first 30 trades will be loss and the next 70 trading times will win.

    Well, so that our margin is able to withstand loss until 30 times, this is needed a risk management, this is where the importance we make a trading plan. You can also read about it here.

    "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times."
    – Bruce Lee

    Those quote can inspire us that learning and practiced 1 strategy for a long time is very powerful compared to learning and practiced 10,000 strategies once. Well, for beginners please try to start consistent on your system and make your trading plan. Focusing on developing your trading strategy, learning a strategy longer is the best way, don't learn a lot of strategies at one time or change trading strategies too quickly, forget about finding perfection in a never-losing way of trading or holygrail. Consistent with "profits bigger or more than loss" is enough.
    If you can apply this then you will have the chance to survive and growth in Forex trading world.

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    Last edited by ara; 07-16-2018 at 08:18 AM. Reason: change some words

  2. #2
    Trader Yayami's Avatar
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    hard to say that trading with good consistency can be built for one year trading experience. beside many traders including me still need more time until i can fully understand my trading strategies along with its plans. becoming that consistence i think it needs traders to discipline to work with money management so we can limit our risk per trade and fix the targets.

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  3. #3
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    When you make a trading plan, you must stay consistent in it and work your ways out to which you can earn well in the best time. So many newbies struggles so much in forex because they have not decided to stay focus and build a system. They will jump from one system to the other looking for a holy grail. Planning our trade can be very much helpful and its one thing we should get ready to work on. We can plan how to manage loss and sure have a good risk to reward ratio.

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  4. #4
    Trader cutiekc's Avatar
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    ara, You made really a great point which means that traders should always trade with good trading plans and not to keep on changing them time to time. Having one trading strategy and then learning to make it better would make the trader more effective. In forex trading market, the more we focus on one trading strategy and trading plan, the more better we can become.

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  5. #5
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    Quote Originally Posted by Tonycee View Post
    When you make a trading plan, you must stay consistent in it and work your ways out to which you can earn well in the best time. So many newbies struggles so much in forex because they have not decided to stay focus and build a system. They will jump from one system to the other looking for a holy grail. Planning our trade can be very much helpful and its one thing we should get ready to work on. We can plan how to manage loss and sure have a good risk to reward ratio.
    It is hard you know, due to when you have encounter so much losses you would be tempted to change the plans. It all takes a strong disciplined trader to stay focused and instead of switching trading plans or strategy the trader has to stay in and put in effort on ways to improving the losing trading strategy. Apparently with consistence we can get that success.

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  6. #6
    Trader layigold's Avatar
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    I have no option than to hit you "thanks " for this thought provoking , educative and insightful thread ! You have said so many things that those who are not patient readers might not fully grasp . Though I am very experienced in retail forex trading , having put up a good solid twelve years yet , I still find a lot to learn and benefit from your thread . Consistency is what a trader must work out by himself and for himself though this usually takes times . I would like to point the beginner traders' attention to the fact that forex trading is not a quickest ways to make a fortune . Yes, a fortune can be made through forex trading and we have so many living examples today but it always follows a gradual process.

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  7. #7
    Trader Killer_Queen's Avatar
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    Quote Originally Posted by Brain View Post
    It is hard you know, due to when you have encounter so much losses you would be tempted to change the plans. It all takes a strong disciplined trader to stay focused and instead of switching trading plans or strategy the trader has to stay in and put in effort on ways to improving the losing trading strategy. Apparently with consistence we can get that success.
    people got issues with their trading and of course we all had this experience for many times in our trading career. hence this not stopping us from doing this business although there are so many people also quitting at the same time. yet this makes us realize hard work pays everything when the time is right and consistency will come toward us soon enough.

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    Planning better is the right way to see we can have all it takes to make profits in the right time. Good consistency in trading is important and here the plans is about making the best trade which is important and would help us trade better. Plans are very helpful and here we need to build a good trading plans that will help us earn consistently which is really promising. So a good plan can turn to be consistent for us if we can learn to grow with it and take lessons where it matters.

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  9. #9
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    I quite understand what you are trying to explain, this is a very good guide for beginners, it is a summary of what traders needs to expect and do as they are trading the market. And no matter what we are doing as traders, we cannot be having winning all the time, there will be losing at times. With the proper trading discipline, patience and management, traders will be able to stabilize, and make money regularly.

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  10. #10
    Trader ola4real's Avatar
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    Unplanned circumstances are the main cause of margin call when we trade forex field, we have to avert this before our investment amount is wiped out in full. The success of traders is on how traders learn how to trade and make a wise plan with what the trader learned concerning the forex market. This will make us to know the amount we can lose and how to coverup for it.

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