1 – Discipline
Discipline helps consistency and without doubt the foundation of everything, not just in trading but in life as well. A person lacking discipline will always struggle to achieve their goals no matter what they are and will be stumped time and time again by frustration and disappointment if they’re not aware of where the true problem lays. There are things you have to do when you’re a trader which can sometimes make you feel uncomfortable, like waiting for a set up when the market is moving and you feel like you’re missing out on an opportunity or putting in a stop loss only to see it get hit and then the price turn in the direction you thought it was going to go anyway and you’re left with nothing. These are two of many scenarios which can really grate on a market speculator. But remember, without waiting for the right setups and getting out of a trade when we are wrong, we will never ever have the tools or be in the position to be profitable in the long term. Trading is really about creating good habits and the tough thing about good habits is that they are often hard to develop and painful at first even though they reward us in the long term. One cool little trick that I do to help develop the students’ discipline is to get them to do something which feels a little bit uncomfortable every single day. This may mean getting up a little earlier now and then or watching less TV or reading more. Everybody is different but by doing something that doesn’t feel natural you are going to train yourself mentally to do the things that you know you must do when you are trading. Develop discipline and you will develop as a trader.
2 – Integrity
Another thing that helps consistency is integrity. When I talk about integrity with a new student sometimes they get a little bit confused and wonder what I mean by it. The simplest way I can describe integrity is by repeating to you something that was told to me when I was a student. When I asked my first instructor what made a successful trader standout amongst the rest he replied, “A successful trader knows the rules and follows them every single time. A novice trader knows they should have rules and maybe even knows what these rules are but never follows them consistently.” Again, this is something we do in real life. There are things we know we should be doing but we put them off or we bury our head in the sand and pretend it doesn’t really matter. Everything always catches up to you in the end and if you don’t show a high degree of integrity and make every single effort you can to follow your rules and your trade plan, what are you really saying about your expectations of your results as a trader? Write your rules, plan your trade and follow them is all I ask.
3 – Diligence
Diligence is more about the “housekeeping” we have to do as a trader. In the early stages of a traders journey, it is vital to make sure that you’re crossing all of the “t’s” and dotting all of the “i’s” and paying special attention to the level of detail you’re applying to your plan and your subsequent trades which you take. It can be easy to take our eye off the ball from time to time and everybody can be forgiven for making the odd mistake here and there. However, it is imperative to remain focused and take care of the details and your processes throughout your whole trading experience. You and you alone are solely responsible for your trading results, therefore requiring you to pay attention to all the details at hand and to make sure that not only do you develop your plan, take trades from your plan and follow your rules but you also follow this up with keeping a solid track record of all of your trading activity. Nobody can do this for you.
4 – Patience
Consistency can not occur with patience. Probably one of the toughest things for a trader to learn is patience. Just think about the verb “to trade.” It alone suggests a very active profession doesn’t it? Yet the irony is that actual trading is often one of the most passive things we could ever do to generate income. Most of my time is spent waiting for price to come to my area of demand to buy or my zone of supply to sell. Needy traders typically think that the more you click buttons the more money will make and if you just sit down and watch the charts and wait for the price to come to you, you’ll never ever make any money. In fact I used to think that myself until I soon realized that I wasn’t following any rules and was just clicking buttons when I felt like it. There aren’t any real secrets to successful trading but I can tell you this: if you don’t wait for price to come to the optimal entry points, you will never achieve the greatest rewards with the lowest risks and the highest probabilities. Our core strategy follows what institutions do. Institutions wait for the best prices to get in and the best prices to get out. Sure my friends, that requires patience and I’m also well aware of the old saying that patience pays in the long run. Let time do its work and your plan will do the rest for you.
5 – Hard Work
Finally we come to the last piece of the puzzle, often the part that many people don’t really want to apply and that is intense effort, plain and simple. Profitable traders are an elite group of individuals who have learned through solid education and experience what it takes to make money in the currency markets. Many other people out there think there’s some big secret to trading and investing, when the truth of it is that the big secret is that there is no secret at all. I remember a good friend of mine once saying about how people always said he was lucky in his business deals and transactions. I said to him, “How does that make you feel when people say you got lucky?” His response was, “You know Sam, I kind of agree with them. I’ve noticed myself over the years that the harder I work the luckier I seem to get.” We all like the idea of trading, I mean who wouldn’t? But most don’t really like the reality and the effort that is required to get you where you want to get. This is just like any other business or venture out there. If you want to rise above everybody else and do the things that most other people only dream about you have to go the extra mile in both your education, your mind-set, and of course your effort. Invest the time in yourself and in time others will want to invest in you.
Be well and take care,