How to Make Consistent Profit In Trading Forex
In the forex faq session today, we are going to talk about how to maintain consistency in trading.
Below is the question from one of our fellow traders:
I am not consistent in making profit, please teach me.
One of the main reason for not being able to make consistent profit in trading is trading with multiple strategies. In fact, if you have a chance to ask any professional traders, you will find that they generally trade with one or at most two strategies.
Focus is in fact the key to making consistent profit in trading. To make money in trading, you actually just need 1 strategy that really works and that is it. All you need is to stick to the strategy like super glue and you will find that you are going to make consistent profit every month in trading without fail.
One good way to know the winning percentage and profit of your trading strategy is to do a back testing. In fact, before I actually start using any strategy, I will do a back testing to make sure that I have at least six month performance of the strategy on hand to see if it is worthwhile to trade with.
Here is how you can do your back testing:
Let says that you have a strategy on hand. You will then pull out the chart six months from today. You will then manually search for trading opportunity according to your trading strategy and then record down one by one the profits and losses made by your strategy.
After you have consolidated the records for six months, you will then compile the overall profit every month using that system. From there, you will then be able to know the performance of your strategy every month.
If your trading system produces around 15% to 20% profit every month, you will very likely be getting around that range. However if your performance is some months profit and some months losses, then I will recommend you to give up on that strategy and find another good one.
A reliable strategy produces profits every month without fail but this does not mean that they don’t produce losing trades. It is just that the overall profit minus the losses every month still gives you profit.
Therefore if you say that you are not consistenly making profit, then I must say that you do not have a working strategy on hand. Spend some time to look for a reliable strategy to use and do a backtesting on it to see if it makes profit for you every month.
Do feel free to give your comments below as it will be very helpful to other traders here in this community.
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