How To Improve Consistency In Your Trading
If you are failing to consistently book profits then there is something wrong in your trading style. Consistent return is very important in stock trading. The problem is change in plan of trading every time they trade. And this is one of the main reasons why most fail.
Misconception of Trading
Traders think consistent profits means making money every day and winning every trade. This is a huge misconception. Consistent profits means successful in at least 70-80% of the trades and losses if any are limited.
This ensures they make profit in one financial year.
How Much Profit is a Good Profit?
Well as an experienced trader let me tell you an honest answer. If anyone makes more than 24% a year which is equivalent to 2% a month. So basically to achieve that you have to approximately make 3% a month so that the losses and brokerages if taken out you end up with more than 24% a year.
Now here is some calculation – 5 lakhs in 10 years will become approx. 54 Lakhs (5,382,581.00) compounded at 24% a year. Which means 10 times the money in 10 years. Compare this to fixed deposit of 6% a year. The money will barely get doubled.
So why traders fail to make even profit while trading? Because they target 10% per trade – that’s like climbing a mountain every time you walk out of the home. So what happens? They fail most of the times.
To make 10% per trade they make rash decisions, take spontaneous trades, take stop loss as soon as they see a negative MTM, or just go and trade anything out of frustration.
If they do the above how on Earth that 10% per trade is possible?
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