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The psychology of consistency: trading well

Updated: Nov 13, 2022

Many people struggle with trading. It's not an easy profession by any means. One must master their emotions, find discipline, consistently identify signal within the noise, and never let ego prevail over reason.

What makes trading hard?

First let's talk about why many fail, and how those lessons may help you succeed:

  • Lacking discipline

  • Allowing ego to prevail over reality

  • Not sticking to a system or trading plan

  • Using too large of position sizes

  • Letting emotions overrule logic

  • Hoping for instant gratification

  • Lack of a trading journal to reflect on wins, losses, and draws

  • Not putting in enough effort or work to prepare

How can one succeed?

Trading is an art and a science. Success relies on a combination of factors. Let's talk about what works.


All the talk of lottos and lambos leaves out a key component of success: discipline. Impulses don't lead to consistency or success. One may have some great trades by winging it, but if that process cannot be replicated, then how can that trading be considered successful?

That is to say, if one doesn't know why a trade is working, how can it be repeated regularly?

To me, discipline is all about having a system, and sticking to it. There's no reason not to evolve a system over time, but not while trading, only instead after reviewing what could work better, and why.

Discipline is also about not taking trades! All too often people decide to take a trade because they're bored and feeling itchy for that rush of adrenaline. Quick word of advice: don't.

Finally, discipline is about cutting one's losses early and riding winners as long as they're working. A lot of traders manage to invert this paradigm much to their own detriment. But it's not too hard to follow once we let go of ego. So let's talk about that.

Objectivity vs ego

It's been said that one should trade the market in front of you, not the market you want to see. There's a lot of wisdom in this advice, because often is the case that our own cognitive bias and ego-driven subjectivity can get the best of us. We may think we have a really smart theory, but if the price action doesn't match the theory, then the theory doesn't hold water insofar as a trading.

When we let objectivity prevail, however, we focus on the signal and tune out the noise of our own bias. That signal being key areas such as fundamentals, macro, and technicals. The cornerstones of our approach at Traderade. When we see convergence across multiple areas of analysis it allows us not only to build conviction, but also to have more areas of a trading thesis to check against such that we can ensure we are still on track. If not, we can exit the trade knowing that objectively speaking it is no longer a valid thesis.

Emotions are the enemy

Trade like a robot. It sounds simple, and perhaps a bit easier said than done, but it is key to our success. When we trade like a robot we're focusing on a systematic, rule-driven approach. Where we do not let our emotions cloud our judgement. Often traders get in trouble with their emotions when their position sizes are too large, their biases are too strong, or they are letting other stresses in their lives impact their decision making.

To succeed it is paramount that one removes as much emotion as is reasonably possible.

Patience really is a virtue

Time isn't the enemy, but impatience is. Remember that when you're putting on a trade you are committing to managing it for the duration of it being on. That means that for some trades patience is key. If we get into a trade and immediately look for a reward, then we're setting ourselves up for potential failure.

On the other side of this, however, it is also important to remember that time is money. Staying in a trade that isn't working for too long causes us to pay an opportunity cost. That is to say, we could have had other, potentially better trades executed during that same time period. Set time limits on trades that are reasonable given the thesis and targets involved. Blend patience and a realistic approach for best results.

Trading is hard work

Always be willing to do your homework. That means several things:

  1. Do your research

  2. Come up with a thesis

  3. Make a plan

  4. Log your trades (entries, exits, position sizes, thesis, etc)

Brain chemistry, psychology, and genetics play a big role

A study on successful Wall Street traders came to the following conclusion:

"So, what makes a professional trader successful? Combining the personality analyses and genetic findings from the present study, reveals that our sample of traders are analytical, integrative, and can delay gratification. They have a genetic profile associated with balanced levels of dopamine, and also linked to moderate but not high risk-taking behavior. Thus, successful traders do not appear to take extraordinary risks and also appear to take a longer-term perspective. Our analyses indicate that these traits may have a genetic predisposition."

In conclusion

Being disciplined, objective, patient, and taking a balanced approach to managing your time are key elements that allow traders to succeed. This isn't just theory, it's backed by science as well.

If you have any questions or feedback please share either or both in the comments below.

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