How do discretionary traders build a consistent strategy?

If you rely solely on luck in trading, without a system or strategy, your luck will eventually run out. A consistent strategy for a discretionary trader is essential to make money. Here are some key points to consider:

1.Establish a Strong Risk/Reward Ratio

Use a favorable risk/reward ratio to enter trades with a high probability of success. Implement stop-loss orders to limit your losses and allow your profits to run. This principle is at the core of profitable trading.

2.Adapt to Your Trading Timeframe

Every trader operates on different trading cycles and examines different charts. Always align your strategy with the prevailing trend regardless of your preferred trading level.

4.Execute Orders Without Hesitation

When your trading system signals a trade, execute your orders without hesitation. Regardless of whether the trade results in a win or loss, maintain your composure and follow your plan.

4.Focus on Profitability, Not Win Rate

Profitability hinges more on the size of your wins compared to your losses rather than how often you win. The magnitude of your gains is more important than being right on every trade.

5.Hold Positions with Confidence

The inability to hold positions often comes from a fear of losing profits. A key difference between professional and amateur traders is the discipline to hold positions rather than opening and closing them impulsively.

6.Use Monthly Charts for Trend Analysis

Understanding and analyzing monthly charts is fundamental for successful trading. All successful traders profit from trends, making this a critical skill to master.

Three Key Considerations Before Entering a Trade

Why are you entering the trade? Have a clear rationale based on your strategy.
What position size will you take? Determine this based on your risk management plan.
When will you exit the trade? Plan your exit strategy, including both profit-taking and stop-loss levels.

If you don’t understand the market, don’t trade. Avoid trading unfamiliar instruments and focus on what you know.

The trading market can be likened to a casino—a machine for wealth redistribution designed by intelligent individuals. To succeed, broaden your understanding of the stock market, finance, and economics. View these disciplines as interconnected parts of a more extensive knowledge system rather than isolated subjects.

Understand market dynamics through continuous analysis and review. Develop a trading system with a high probability of success, refine it over time, internalize it, and create a feedback loop to improve your performance.

By following these guidelines, you can move from relying on luck to building a solid, consistent trading strategy that increases your chances of long-term success in the market.