Leo Losing Money

How to Make Money Consistently Trading the Markets

Are you a new or experienced trader fed up with losing money?
Well, your problems are likely due to poor trade selection, your emotional decisions, or both.  Both of which can be improved by following your strategy rules and neutralising your emotions.
I want to reassure you, that you can succeed and make money if you’re prepared to put in the effort.  You will also need patience and persistence.  
So, how do you turn things around and make money consistently?

3 Habits to Make Money Consistently Trading the Markets

1. Manage Your Emotions

 Speculating in the financial markets as a small retail trader is one of the biggest mind games on earth.  Mastering trader psychology will help you conquer your emotions.  Ninety-five percent of the trading errors you make are likely to make will stem from your emotions. The ones that will cost you money are;
  • Fear of Being Wrong 
  • Fear of Losing Money
  • Fear of Missing Out
  • Fear of Leaving Money on the Table
The reality is, that the market doesn’t care about your feelings.
Your goal is to remain emotionally balanced, so you can neutralise your emotions.   So, your reaction to a winning trade should be the same as a losing trade.  When your emotions oscillate between euphoria after a win and heartache following a loss, trading will quickly become unenjoyable and draining.  This often leads many to give up.
I highly recommend you record your emotions and any fears you have in your trading journal before placing a trade and while reviewing results.  You may start to see a pattern develop.  For example, losing trades occur most often when you’re feeling angry or afraid of losing money.
For more information on Trading Psychology, I highly recommend reading Trading in the Zone by Mark Douglas. 

2. Keep a Journal and Regularly Review Performance

 If you want to treat trading like a business you need good records.  A trading journal is a must to record each of your trades, emotions and assess performance.
Your journal will help you to discover mistakes in your routine that may be contributing to your losing streak.  Poor trade selection is most likely the cause of your losing streak and/or emotional-based trades.  It is up to you to apply what you learn from your mistakes and not repeat them. 
I recommend you review your trades weekly or monthly, depending on how often you trade.   Your goal is to review each trade and ensure you’re following your strategy and risk management rules. 
Losing Streak Man

3. Understand there is a Random Distribution of Wins and Losses

In using charts to help identify trades, your goal is to increase your edge with as many confluence factors as possible.  The thing is, it is not possible to determine the future with accuracy.  You don’t know with certainty whether your next trade will be a winner or loser.  But you don’t need to.
That’s because there is a random distribution between wins and losses that define your edge.  While ever your strategy gives you a positive edge, it will continue to do so over the long run.  Your job is to keep trading and letting your edge play out which will increase your returns over time. 
If you are currently investing in the Stockmarket, I encourage you to read our posts on Reviewing Your PerformanceCommon Investing Mistakes.


A final point to remember is that anything can happen in the market.  Good trades lose money and bad trades can also make money.  As long as you’re following your rules and managing your emotions, you will be profitable in the long run. 

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Posted in Mindset, Risk Management, Stock Selection, Swing Trading, Trading and tagged .