Creating Consistency by Steve Ward

"Consistency is in the mind, not in the markets", Mark Douglas, Trading In The Zone
 
What is consistency in trading?
 
“I would like greater consistency in my trading.”

This is one of the most common phrases I hear when I work with a trader. The first question that I will ask them is to define what they mean by consistency.
 
Would you like greater consistency in your trading?

What does consistency mean to you?

If for you consistency means making absolutely the same amount of money every day, week, month or year then this may be an extremely challenging goal for you to achieve.

In most cases the trader wants some form of consistent profits from their trading, without any periods of drawdown, or flat months or weeks. Is this possible? Maybe, and their are certainly some traders who have quite consistent levels of P&L returns, however for the majority of traders it is simply not the case, and the key reason for this is the interplay of the trader with the markets. If a trader is making £x per period when there are ten tradeable opportunities then it would not be unrealistic to expect them to make only ½ £x when there are 5 tradeable opportunities (all other things remaining equal e.g. position sizing). The number of opportunities and the nature of those opportunities does therefore have some impact on P&L and to a degree this means that as traders we need to go with the flow a little accepting that there will be P&L fluctuations.

An exception to this often comes where a trader is having very big P&L swings and the stress and frustration of such events is beginning to affect them. 
 
So can traders achieve consistency?

Yes but maybe not in P&L terms. Consistency in trading is derived much more a feature of consistency in the way that you think, feel and behave. This is part of the value of having routines for preparation, evaluation etc. Because the markets are largely out of our control we cannot guarantee consistency of returns. However what we can do is to recognise those elements of trading that are controllable by us and to focus on gaining consistency through these aspects.

What is under your control?

• Your trading preparation
• Evaluation process
• Strategy development
• Execution of your trading strategy
• Lifestyle factors such as sleep, nutrition, exercise, relaxation
• Your thoughts
• Your feelings
• Your behaviours

There are a great many factors that are under your control and that you can directly make a decision to do and with high reliability of the possible outcome. In trading if you are seeking consistency then you need to make a shift in your thinking so that for you consistency is all about consistency of approach and execution. Once you have done this the chances of you achieving consistency are considerably greater than if you try and aim for P&L consistency.
 
“It took a long time for me to realise that chasing consistent P&L’s was fruitless. I put a lot of energy into trying to achieve what I thought would be a less stressful outcome – consistent results – but actually it was more stressful and less profitable. Learning to accept that I can only control what is under my control and that my trading results will be influenced by the market conditions has been a major breakthrough for me.”
T.D., Trader
 
 
Practical Strategy : Creating Consistency
 

1. Make a list of the factors that you have control over in your trading and in your life.
2. Think about a typical trading day/session and what factors are influential with in it 
3. Now make a list somewhere of your key performance processes – the areas where you are going to direct your focus and ensure that you gain consistency 
4. Create you own winning routines and rituals to support your trading performance 

Steve Ward
Trader Performance Coach