How to earn consistent profit.

In order to get consistent profits, we need to properly manage the risk.

Proper risk management helps you cut down losses. It can also help protect traders account from losing all of its capital. The risk occurs when traders suffer losses. If the risk can be managed, traders can open themselves up to making money in the market.

Risk management is an essential but often overlooked which creates a big problem for traders. A trader who has generated good amount of profits can lose it all in just one or two bad trades without a proper risk management approach.

Trading game is the battle among institutional traders to try to control the market and drive it towards their interests. 

The impact of Institutional traders in the market prices can be substantial.

The 1% rule for institutional traders limits the risk on any given trade to no more than 1% of a trader's total account value. 

Trader's can risk 1% of their account by trading either large positions with tight stop-losses or small positions with stop-losses far away from the entry positions/price.

Don't break your rules.

Step 1: Have a trading plan in place. Backtest your trading plan. The basic idea behind back testing is developing confidence and strong understanding of the trading strategy that you are trading( Practice makes perfect).

Step 2: You should assume total responsibility for everything that is going to happen to you. You should be really looking at trading from all angles. Try to imagine extreme scenarios, you would be better prepared for negative things might happen to you. When you do that you would have a better chance to stay in the game of trading. Even more if you stop doing the same mistake over and over again, you'll have a great chance to be as successful trader. 

Step 3: Find your weaknesses and work on them. Once you find them & eliminate them. If it helps you, develop a diary or a writing book and write all of your daily trades. 

Figure out what is going wrong and how can improve by not repeating the same mistake again( review yourself).

Analyze yourself on a daily basis. You are the most important asset in trading business. So, logically, you should spend most time to analyze your actions.

Parts of the analysis should include analyzing your feelings towards trading, like major things are going on in your life outside trading. The more you are aware of those issues (and write about them preferably in your note book), the less central they will have over your life and your trading as a result. 

As yourself this question: 

1. Did I follow my rules? If your answer is yes, pat yourself on the back. 

2. If you lost money, but you still followed your rules, then pat yourself on the back.

3. It is better to lose money on some days following your rules than make money breaking them. The point here is to be consistent and consistency is reached through persistence and great discipline.

Thank you for reading.

:)