Many successful forex traders will tell you that consistency is key when it comes to a profitable trading strategy. If you want to bring in consistent profits, you can start by setting rules for yourself to follow. These rules are meant to help with discipline and to keep you on the right track as you work on building your profitable strategy. Here are a few examples of some self-imposed rules you could set:
- Not risking more than 2% of your total account balance on a single trade
- Only entering a position when data supports your idea that it is a good move
- Entering positions based on specific data
- Keeping a trading journal and logging every single trade in detail
Without rules like these, you’ll spend a lot of time thinking about what to do, when you could automatically know what to do thanks to a well-thought-out plan. Consistency can help you to hone your plan, as you’ll be able to tell what works and what doesn’t after using the same plan and strategy over time. Eventually, you’ll have automatic responses to certain situations that help you act quickly so that you don’t miss out on any opportunities in the market.
In the beginning, it will probably take some work to come up with a trading plan that works for you. You might find that a certain strategy takes too much time, that you want to risk more or less than you initially thought, and so on. It’s ok to tweak your rules and plans at this point – the idea is to come up with a consistent plan after trial and error. Once your plan is in place, you will be able to make better decisions and should start to see a sharp increase in profits. Know that what works for one trader might not work for another, as there is no one-size-fits-all plan when it comes to forex trading.
The market can be unpredictable at times, which is why it’s best to have rules and a plan in place to help guide yourself. When things come to you more automatically, you’ll be able to enter positions more quickly without extra thought. Once you’ve set a consistent plan that works for you, you can expect to see improvement with your trades that wouldn’t be possible without set rules.