3 Changes to Consistent Profit with Day Trading

This year I finally was able to experience consistent profit with scalping Forex markets, and it’s my third year day trading in the markets in total.

If you’ve been trading for a hot second, then you probably already know just how difficult day trading can be.

Most traders have to focus on surviving the learning curve for the first one to two years of live trading.

Once you can read charts and find a strategy that matches your personality, I personally don’t think the issue with what takes so long to gain profitability has to do with not knowing enough about markets but instead has to do with developing enough trading discipline to be able to follow your strategy and rules. For me, there were a few things that happened that led to the tipping point from consistent losses to consistent profit. 

There were 3 things I did during that time that likely led to this big shift in my performance. Of the three, the last one I will share with you was probably the most beneficial of them all.

But before we get into the thick of things, I want to let you all know that last week I published my first book, The Seven Habits of Successful Day Traders, a quick guide to profitable day trading habits. If you want to learn how to structure your daily and weekly trading routines, how to always take your stop losses, and how to shift your trading mindset to stay comfortable and calm in front of the charts, CLICK HERE to get your copy through amazon.

So, ready to dive in?

Consistent Profit Change #1 Take Only One GOOD Trade Per Day

One of the first big actions I took that got this profitability ball rolling was to stop trading multiple times a day and just focus on taking one good trade a day. At that time, I was struggling with following my stop loss and take profit rules. I would frequently shift my stop-loss if the price got too close because I was afraid of losing on a trade that could turn around. 

I took the strategy that I was using, gave it a backtest to see if it would be profitable if I only took one signal instead of the three or four I would usually get, and sure enough, it still held.

Thus, for about a month, I focused on following all of my rules on just one trade a day.

During this time, I wasn’t worried about the money, I just wanted to finally know I could trust myself to follow my rules.

Remember the movie Forgetting Sarah Marshall? It’s like how the surf instructor tells Jason Segel’s character to do less and less as he’s learning to get up on a surfboard, to the point where all he can do is just lie on the board and lift his head. It’s a funny scene but doing less is still a useful antidote for handling chronic trading issues.

If scalping or day trading is feeling overwhelming, maybe dial it back a bit and see if you can take just one good trade a day or even per week before trying to ramp up the intensity again. Who knows, perhaps by trading less, you will be able to achieve consistent profit.

Consistent Profit Change #2 Get Enough Sleep/Trade at a Time That Works For You

The next important change that I made was to make sure I was trading at a time that let me get enough sleep. I currently wrestle with pretty severe insomnia, an issue I’ve had since I was a teenager. I live in California where the end of the London session closes really early in the morning. I wanted to be part of this crossover into the New York session but sometimes waking up at 530 in the morning would lead to a lot of mid-morning or afternoon naps to make up for lost sleep after the nights I experienced insomnia.

I decided to create a strategy that would let me trade right when the stock market opens, so I could at least get an extra hour of sleep. It doesn’t sound like a big change, but this was huge for me to be able to have enough brainpower and energy to follow my rules and stay awake through the session. 

If you’re waking up exhausted to trade or don’t sleep well at night in general, making sure you get enough rest and take care of your body can have such a big impact on your trading performance and help you achieve consistent profit.

Do you have a hard time sleeping at night? Can you tell if it affects your performance? Let us know in the comments below and add if you have any good tips for staying clear-headed and energized while trading. It’s seriously a game-changer.

Consistent Profit Change #3 Track How Much Your Mistakes Are Costing You

Lastly, there was one more big shift I made that was probably the most powerful trick I’ve ever used to stop making trading mistakes and finally get into profit and that was to track how much my trades were costing me.

Some of you may be familiar with this kind of habit like when keeping track of your expenses when you want to get out of debt, sticking to a budget, or saving for a big purchase. When you record every one of your expenses, you start to notice where your money is going and can make a conscientious effort to cut back on the areas you splurge most, such as buying takeout too often or over-funding your weed addiction.

Because the issue isn’t losing money. It’s not like you’re going outside and dropping money on the ground. It’s certain actions and choices you’re making that lead to loss over time.

This is true of trading too. We need to be able to track and find out which behaviors are costing us the most money so we can prioritize what to improve first on our path to consistent profit.

So to track how much my mistakes were costing me, every time I made a mistake, I would write on my excel sheet of my trades what mistake was made and how much it cost.

If my mistake was pulling a winning trade too soon, I would write how much money I missed out on between where I exited and where my planned take profit was.

If I took a trade that wasn’t part of my signal criteria, then I would record what I’d lose.

If I made money on any of these mistakes, I would just record the mistake cost as $0.

This helped me generate some data about my mistake making. After about a month of doing this, I started making money in the markets with the same strategy I was using while I was still consistently losing.

Final Thought?

Sometimes all it takes to turn your life around is a big epiphany combined with simple actions.