Consistency is defined as “steadfast adherence to the same principles, course, form, etc.”.

When trading the stock market for a long time period, how important is consistency in trading results?

Let’s examine what it means to be consistent, specifically when trading:

  1. You have to show up regularly – this is the basic assumption of consistency, the fact that task performed is not a one time project but a recurring process, you have to be committed to it for the long run, showing up to trade once in a long time period or sporadically, reduces consistency.
    In order to stay consistent you have to trade in short intervals, better if they are fixed intervals, say every two or three days if you are a swing trade like me.
    In order to comply with this requirement, a trader has to find the hours of the day where he has free time to trade and is focused on the trading task, many decisions are taken in this time window – the trader must be in focus and undistracted for the entire trading duration window.
  2. You have to follow the same steps every time you sit down to trade – in order to make trading a routine, a trader must follow the same steps in order to make sure the process is completed from A to Z.
    If a trader does different tasks every time, the results are unpredictable and are hard to follow. This means that there should be a trading routine, constructed in order to complete the entire trading process, this should be part of the trading plan designed to guide the trader on the path to consistency, think of steps like :
    – Screening the trading universe to find the next opportunities.
    – Matching the next opportunity with the right type of order.
    – Going through the unrealized part of the portfolio to weed out the orders that are no longer relevant.
  3. You have to have a trading strategy, one that you absolutely trust on sunny or rainy days, this is super important because not all trading days are sunny, profitable days. It’s especially difficult to trade on losing days as the emotional burden of losses to the portfolio increase.
    A trading strategy will make sure you are walking on a pre-defined path to a profitable portfolio, and not wandering around trying to find your way to the target.

The features above will help any trader be consistent and stay on course to a profitable portfolio, finding a big diamond once every lunar eclipse is like winning the lottery, more a gamble than real, consistent trading, benefitting from the stock market as a secondary or even primary income source requires the trader to be consistent, not a gambler.

Trade Smartly,

Alon