Online trading

Why You’re Not Consistently Making Money With Your Trading

The stats are pretty clear – only a few traders are consistently making money from their trading activity. And millions of people worldwide still engage in trading every day. But why do many traders lose money while trying to make a profit on trading? And how can you join the few people who are consistently making money with trading?

Why Traders Lose Money

Online trading is the hardest yet simplest job in the world. While you can trade on your laptop from home or a hotel room, it is very hard in some aspects since 4 out of 5 traders fail. So, what are the reasons behind those failures?

Lack of trading strategy 

Most traders fail to bring their trading to its full potential because they trade without a strategy that works. Some traders don’t even know what a trading strategy is, let alone know how to develop one. As a trader, you need a strategy to keep you on track and achieve profitable trading results.

Failure to review trade results 

Most traders don’t keep past trading records that they can study later to sharpen their skills. Scientists have journals to keep track of their findings. This should be the same for online traders. Sadly, only a few traders have a trading record that they can review.

Trade with emotion

Many online people trade with emotions and end up wasting their hard-earned money. For example, a trader is afraid of losing days or weeks after having multiple losses in trading sessions. This worry can trigger the trader to blow up his trading accounts.

Lack of discipline

As a trader, you need to be very disciplined if you want to have successful trading. Lack of discipline such as over-trading, revenge-trading, executing trades prematurely, violating risk management rules, breaking trading rules, and many more are often the cause of the most common trading mistakes.

Unrealistic expectation

Trading involves some level of risk. Yet, most people are willing to take higher risks, believing they are equipped to trade after reading some books. While some traders make profits, many lose their hard-earned money on unrealistic expectations. To be a successful trader, you need to combine a high level of knowledge with experience.

How To Make Consistent Money With Trading

Making money with trading

To make consistent money with your trading, you need to note the important things we’ll be discussing in this section.

Define your trading strategy

You need to focus on a trading strategy that works for you. Master and incorporate this trading strategy as part of your trading plan to boost your profit. A trader who has a defined trading strategy will have the opportunity to make consistent money.

Review your trading process

Like we said earlier, most traders never go through their previous trades again after closing them. They move to the next trade, forgetting the thing they did in the past, and avoid learning effects. To make consistent money through trading, make sure you review your trading process regularly and keep an open mind while doing so.

Make revisions where you notice weakness

You need to take your strategy through a process of trial and error for confirmation. While this process takes a lot of time, it is effective and increases your chance of success. To see your weakness, write down your mistakes and put those physical notes next to your trading screen where you can see them at all times.

Always work to improve and adapt to market

You constantly need to change your trading behavior from trade to trade if you want to adapt to changing market conditions. If you don’t adapt to changing market conditions, you will never make decent profits. Volatility is another factor to keep in mind when trading. It keeps on changing, and when volatility changes, you have to change your trading strategy by adjusting your plan and analyzing volatility accordingly.

Surround yourself with like-minded traders

Surround yourself with the type of trader you wish to be like. You need to know what other traders are doing to make money because crowd mentality can move the markets. Learn everything they are doing to make a profit from the market. Ask questions, find out what they’re trading, and try to know which strategies they’re using.

In Summary

Trading is a challenging endeavor, but you will start making consistent trading profits when you set yourself up in a much better position. However, you need to work hard and follow a sound trading plan to reduce your trading risks while enhancing your profitability in the market.