This question on performance came in from a trader over the weekend. I think it’s something a lot of us have to deal with at one point or another (and probably more) in our trading development.
I have trading the ES market for three years and I still cannot have consistent profits. I love the ES market. I trade my plan and practise money management.
Wondering if it is the method or if it is ME..or the unseen spiritual forces that do not want want me to succeed.Of course I take responsibility what my own trading mistakes.
There has to be a breakthrough somewhere somehow.
Problems in your trading performance generally come from one of two areas. Either you are failing to stick to your plan, or your plan is broken. As I noted in my book, one of the major advantages to having a really well constructed and defined trading plan is its usefulness in helping you make these types of assessments.
This trader has said that he’s been sticking to his plan. If that’s indeed the case, then we have to look to the plan to figure out what’s going on. It is definitely worth looking taking some time to reassess things like market, timeframe, and the trader’s risk profile. Assuming all of those elements of the plan are fine, it basically must come down to the actually trading system/method being used – the buy/sell strategies employed. Are they, in fact, profitable?
Maybe the better question is if you’ve been consistently using the same strategy or whether you’ve been bouncing around.
If you have a system which is readily back testable, then do that. What are the performance figures like? If they weren’t profitable, then you know where the problems lies. The question you then have to answer is whether it’s a drawdown period for the system or whether it’s just a bad system. If the result were good, then where do they deviate from what you actually experienced and why?
The bottom line is that you need to find the route cause of your problems. Once you do that you can make the necessary adjustments to improve things.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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