Someone making 10,000 in a day doesn’t mean I’ll call them a good trader! What you should be aiming to get is consistent profits month by month! In this article, I want to go over six proven steps that helped me and many of my students to reach that “Phenomenal Level” in trading.
Step #1 Clarify What You Want to Achieve
Before you start thinking about becoming a consistent trader, you need to clarify precisely what you are looking for from this profession! You need to check what percentage of gains would be enough for you to be happy, check how much you would accept risking, and how much free time you have to invest in this journey.
Most people that come to this profession have just one thing in mind: they want to make 100% return weekly and without much work. Do not get me wrong, it can be done, but if you are planning to make those kinds of returns, be prepared to spend 14-16 hours in front of your screen and sacrifice a lot of your time!
My suggestion to everyone who is looking to try trading (any market really) is always the same: try to learn how to make 10% consistently. Once you prove to yourself that you can do it for a year, you can quickly scale up your account, position size, and increase that return. So, aim for consistency!
Before you move to the next step, I want you to go and spend some time thinking about your goals. See if what I said above would be acceptable or not. There is no point in trying this great business if you start with unrealistic goals.
Step #2 Get Us Much Knowledge as You Can
Once you figure out that this can work for you, we come to the most boring but crucial part of this entire process: getting a good education. To become an expert in any field, you need to understand how it works. You have plenty of resources online, but you need to understand everything. If you are new to trading, I suggest that you start from the beginning: learning what trading means, basic trading terms, technical analysis, fundamental analysis, supply & demand… Try to get as much information as you can. Still, before you move on to the next part, I suggest you practice everything you learn. There is no point in becoming a good trader if you can’t identify a trend or don’t get why something moved.
Quick Tip: Getting a good Mentor can be beneficial here. A mentor is not something you need to have, but from my experience, if you have someone good, he can cut your learning time and prepare you for trading pretty fast.
Step #3 Learn The Strategy That Will Suit Your Personality
We have two types of trading styles: day trading and swing trading. Before you start searching for a system, ask yourself what kind of trader you want to be. Are you someone who will be all day in front of the screen and have 20-30 trades per day, or someone who wants to work few hours and have few trades per week only?
Both types of traders can be consistent, so that is not the problem. But I want you to try to be realistic with yourself, and if you know that you have a limited amount of time, go for swing trading and leave day trading for people who have a lot of free time during the day.
I will not recommend a system for any traders since I sell a few systems. It would not be fair of me to do that. But what I want to let you know is that you should not get every system that you can find on the market. Do your research, see if the person who made it traded the system for more than a few months, and check if he traded a live account (this sound bad, but I saw too many “gurus” that never actually traded a live account, but sell and teach others).
Once you find a system, stick with it for six months and understand every aspect. I want you to know every reason you are taking a trade!
Step #4 One Zero Rule For Success
One Zero Rule is one of the things that helped me to become a consistent trader. The idea goes like this: we all know that most everyone loses their first trading account, which is fine, So start every system or strategy on a small $100 account. It is better to lose $100 than a $10k account. And try taking trades according to system rules for a minimum of 1 month. The goal is to have 30-50 trades (less than that, I would not be sure that you can understand the system). Try to use the same risk management as you would use on a larger account (No aggressive plays). Finally, go and check all trades back in history, check if all rules were followed, and of course, check results.
If you are satisfied with the results and you made a consistent profit, it does not matter how much you made, since the point here is to check how well some system works for you add “One Zero” to account.
So next month, you are going to trade with a $1,000 account and follow the same rules. At the end of that second month, again check results, and if you maintain equivalent results, you can add another “Zero” to balance.
If you see worse results, I suggest sticking with the same amount of capital and giving it another 30 days. This way, you will make sure you follow your rules, and managing larger positions will be much easier.
Step #5 Keep Tweaking Your Strategy As Much As You Can
Every trader’s dream is to find a 100% winning strategy, what we call Holy Grail. But let us be realistic: it is going to be next to impossible to get to that level. Of course, this is a good thing because we should always look to improve our system as much as we can. And you will see big improvements months after month. You will not get to a 100% win rate, but you can get high.
The best way to start tweaking your system is to use a trading journal. Make sure to write down the full reason behind each trade with as many details as you can. Do not try to rush this part. Your improvement can come after 50-100 trades. Once you build a library of trades, it will be much easier to see what setups worked best.
I will not go into many details here about all the ways that you do this; we will make a special report or video about that. But the parts that you can analyze are what instruments showed the best results, what time frames gave you the best success, what time of the day was most profitable, and things like that. Once you start analyzing data, you will easily see what part you can change in your current strategy to help you in the future.
Just remember, the more trades you have, the more data you will have to analyze, so when you reach some normal level of 5,000 trades, your system will have a 70-80% win rate easily.
Everyone can become a consistent trader if they put in a little bit of work and do not use a shortcut.
Remember, each one of us is different. Someone will become successful in three months. Another may need a year to reach that goal. And while you follow these five steps, one thing is sure, you will get there. I believe in you, so should you!