Keeping consistency as a trader is one of the most difficult aspects to deal with especially when you're a new trader looking to find some sort of evidence that shows your efforts beginning to pay off after burying hours of firsthand experience into an activity that doesn't always reward endurance.
There are often periods during the foundational phase in becoming a trader when doubt casts a long shadow over the sustainability of our long term success if encountered with a disastrous losing streak that seemingly puts our skills into question.
Reflection is a great way of looking back on your trading performance and determine whether you've drifted away from your original plan or take not of market misfortunes that could've swung a heavy blow to your trading account and more importantly your confidence.
Here's are a few questions to ask yourself when you doubt yourself:
Have I employed the correct risk management in my trading?
Often you hear of traders who become so confident in their brief trading results they lose focus of the reasoning behind sizing down the severity of risk and its impact on their trading account and instead go for profit glory. In the end they finish with a broken ego and a trading account with less funds than initially started.
If you tick this box then you need to relook at the way you deal with risk and if you're able to accept the learning process will have many stumbling blocks of which you will fall upon along the way. By taking on more risk than what you should be you're decreasing your chances of staying in the game for a long period of time.
Am I utilising the advantages of a trading strategy or taking trades based on guesses?
A crucial indicator in assessing if you've got the skill to be consistent considering most successful traders have a trading strategy that's be back tested and proven effective. Strategies take a lot of the uncertainty of non-planning by having pre-determined rules for the placement of stops and exits as well as entry points.
However as a new participant you aren't acquainted with a workable trading strategy that fits the exact market conditions your trading in, leaving you vulnerable to being sucked into a financial black hole by basing trade's off guesstimates.
Strive to devote time in studying the actions of the market by taking down notes and observations of what you see. Start with the most basic of trading indicators, namely price action, and work yourself through the most well known one's so you're understanding is aligned to what others may be waiting on for a signal.
Can I interpret the market condition and implement the right strategy at the appropriate time?
Market conditions are essential in profiting from trading but knowing when the best times to be in the market as well as the right trading setup to employ at that specific moment makes all the difference. Realising that the market doesn't generate the same type of movement day in and day out goes a long way in avoiding the trap of overtrading and taking trades that don't match the market's expectations.
The different forms of the market don't unfold themselves in one month let alone a year which is why it takes a number of years of being actively involved to truly understand what you're dealing with and how to tame the nature of the beast.
