Consistency is the main goal a Trader should have.
Forming a trading strategy is one of the most important things to do before starting to day trade or invest in anything. In fact, it is so important, that before every trade you make, you should be reviewing your strategy and seeing if your current trading plan lines up with it.
How do you come up with a trading strategy?
Coming up with a trading strategy should be something that is taken very seriously. In order to do this correctly, you should have a couple of things figured out.
First, what is your end goal?
What do you want to accomplish by trading? Do you want to have a certain dollar amount by a certain time? Do you want to generate weekly income? Do you want to grow your retirement account?
Being able to answer these questions will allow you to start your strategy off because you now know what you want, allowing us to work backwards from there. At ChartBulls, our goal is to generate 1-3% profit a day in whatever asset we are trading. This is a minimum goal and might not seem like much, but when paired with consistency and compounding, can generate a lot of income quickly. We have found that it is much easier, and probable, to generate these small percentage gains than it is to hit a homerun 10% gainer every day. We are in for the long run, so pairing these small daily gains leads to fantastic results when looking into the future.
Being consistent is the hardest part about trading, but also the most important. We need to be consistently profitable. Bringing your consistency to an achievable goal will help you eliminate emotion and allow you to perform your strategy.
Next, learn your risk tolerance.
This is very important because you will need to know if it is too risky for you to enter a trade or not, no matter the technicals. You will also need to learn what your risk factor is so that you can learn when you should cut your losses on a trade. Being able to define this risk level for yourself will allow you to trade emotionless and really follow what the money is doing. Another step to consistent profit. Risk factor is something that only you can figure out, but basing it on disposable income that you can live without is a great way to start.
Lastly, you must include continuous learning in your strategy.
No trading strategy is perfect. We always think that we find the perfect set up or asset to trade only to find a trade where nothing goes as planned. It is important to walk away from a losing trade with a mindset of learning what you did wrong, so that you can never do that again. Trading is about constantly refining your skills and knowledge so that you can be consistent. Be a consistent learner so that you can be consistent with your profit.
I invite you to come learn your Trading Strategy at the ChartBulls Trading School and group chat. We promote finding a strategy, executing, learning, and then repeating. We look forward to trading with you.