Looking at the future - Consistency

The only thing that matters in trading is that whats your bottom line.

Its not important that you have a great technical or fundamentals based algorithm, the fact of the matter, as we discussed a few posts ago is how often are you successful.

There has to be consistency in your trading. You cannot work with a win ratio of 60% and then see 100% of your trades making losses for 2-3 days. Something is wrong, if that happens. You dont trade because you have mastered statistics. At the end of the day, do you feel happy that you traded right? (not just making money), but whether the method that you follow, is money making or a random flash in the pan.

At TradeWithMe, our research has focused on why trades fail, and used that learning to improve. We were more than 150 points down on Nifty Positional trading in October till date, but in just one day today, we recovered all the losses as we realised what was not right.

So what makes the difference? Its about verifying that losing trades failed your trading rule reasonably or not. If that can be evaluated objectively and you feel that you are in the 90%+ rating there, then your system is consistent. Otherwise, go back to the drawing board.

Take our Fast reversal trading system for BankNifty. On October 8, we did some 17 trades with a net loss of 21 points or so. Thats pretty inefficient. On October 9, we just did 3 trades and made over 300 points, after analysing and fixing what didnt work on October 8. Its not about what went wrong, but what didnt work..... Think about this and re-invent your systems periodically.