Trading Tips Does Your Trading System Have Built-in Inconsistency?

Are you trading profits suffering from a built in inconsistency? Yeah, built in inconsistency, that's what I'm talking about. We're going to look at today are the three main areas of inconsistency regarding your ability to profit in your trading. One of them most everybody's familiar with. The second one everybody's maybe familiar with but not really thinking about a whole lot. The third one, very few people are even aware of. And yeah, that's this built in inconsistency and I'm going to share with you today. So yeah, what's with this built in inconsistency? Well, see, my background is I'm a quality engineer and quality is all about consistency. That's like at the foundation of quality assurance is being able to, you know, do something, do it well and do it consistently. That's how you achieve quality assurance is you got a handle on your process where yeah, you know that you're getting good output. So that gives me kind of a different perspective on trading that's really helpful. So what are the three areas that we're talking about, the three general areas that create inconsistency in your profits? Well, and, and we're not talking about the uncertainty of the markets. That's a whole separate issue that's independent of this. This is just really, you know, things that are really within your control. So the first main area, and this is the one where everybody's really familiar with it is where you're just playing, deviating from your strategy. You know, you're just plain not following it. You know, maybe you're chasing trades, maybe you're hesitating, maybe you're doing, maybe you're doing something sometimes and you know, other times you're not doing those things. But you know, it's just, it's in your execution really. And so that's the first general area and that's what everybody talks about. You know, all the trading psychology is all about and it's significant, don't get me wrong, I'm not dismissing it. But again, everybody's pretty familiar with that one. And now one thing that's good to clarify here though is it's not purely psychological. A lot of people think it is. You know, it's just a matter of discipline and it's purely psychological matter. Maybe it's your beliefs, your relationship with money, some deep mommy, daddy issues, whatever, but they think it's just psychological and it's not. There are practical aspects of it as well that you're going to find out about here in just a minute that really do affect this aspect of it, this area, this whole not being able to stick to your system thing or stick to your strategy. The second area that inconsistency comes from, and it doesn't get talked about much, but it happens a lot, is just plain people, you know, messing with their strategy, making changes to it on a regular basis, not talking about, you know, your day to day, you know, deviations, talking about, you know, you actually going in and making changes to it, making adjustments to your strategy, you know, maybe add this, you know, change your setting on that. And so this is one where you're kind of making modifications to the strategy itself or your system itself. And so it's not really a, you know, a poor execution kind of thing. It's a, I'm changing, I'm changing the thing itself. And so that one. And that happens a lot. You'd be amazed. And here's one of the contributors to that. And again, this is, this is not just purely psychological. This isn't just because, you know, you feel like, you know, it's not working. I want to go fix something, so I'm going to make some adjustments or I'm going to try to make it better. So I'm going to make some adjustments or I see additional opportunities, so I'm going to make some adjustments. That's where this comes from is, you know, those kind of urges and notions. But one of the biggest contributors to it, believe it or not, is that so many traders, you know, you ask them about, you know, their system. Oh yeah, I know my system, sure. And so they don't even reference anything. Most traders don't even have their, you know, system written down. And so they're trading from memory. And that's huge. That is a huge issue. Because, you know, if you're trading from memory, you can just say, you know, yeah, I know my system, I know it, I don't need to have it written down. But the thing is, let's say you're having a rough week. Maybe it's been a rough couple of weeks now. Maybe something happened with your car that hit you with a $5,000 expense and so now you're feeling financial pressure or like I said, you're just in a great state of mind and things aren't going well. Part of you is going to have that urge to fix things or make them better. And so you're going to go in and change, you know, make a couple of changes or adjustments and, you know, maybe it'll help, maybe it doesn't. But, you know, a little bit of time passes and then, you know, the cycle repeats and, you know, you make a few more changes. And at the end of three to six months, you've made a lot of changes or at least some significant changes. And what you're working with really isn't even the same thing that you were when you started this, you know, this time period. And over a year's time, it can change dramatically. I mean, I had this one guy come to me for coaching, and, you know, first, one of the first things we did was we took a look at his system and it was this huge thing. It was like nine pages that he sends to me. And, you know, and he's trading, like, super fast. It's like, you know, all his trades are taking place in a matter of minutes, but he's got this huge document and all this stuff in there. And I'm looking at it, I'm like, dude, you can't even read this in the time it takes you to, you know, execute, you know, enter and exit a trade. He's like, yeah, I know, but they know that's. That's, that's my system. Like, okay, well, let's take a look at them and, you know, we'll take a look at some of the data and we'll, you know, see, try to figure out how to fix this. And in fixing it, what we found was his base strategy that he started with. Really, it was. It was pretty straightforward, basically price action with one indicator, you know, and then we were looking at his, you know, his entry criteria and his exit strategies and all this kind of stuff. And what we realized was, yeah, he had added this, that, and the other thing. When we pared it all back down to just his base system that he started with, it really worked. And I mean, it really worked well. It crushed it. And so the thing is, like I said, it's really easy over time to, you know, for your system to become something very different from where it was at a certain point in time when it worked. And that's a big problem. Okay, so that's the second area. So the first area is just plain deviating from your system. You're just not following what you got. The second one is where you're making changes somewhat, frequently, and over time, it really changes a lot. And you've gotten way away from your original strategy, which probably was pretty decent. Okay, this third area is really huge. And again, this is where my background as a quality assurance engineer, it lets me see. And this is How I'm also able to help people fix this. And this is where you have a built in inconsistency in your method. Now here's what I'm talking about. This is one where it just plain within. Within your strategy as you have it, there's variability that's kind of built into it. Well, and here's an example of what I'm talking about working on this one guy. And part of his, you know, set up for his charts before he even started, you know, looking for entries and everything. Specifically, one thing that he did was, you know, he was using Fibonacci lines. Well, the way he put them on there was highly variable and going, going over different charts, different. And you know, going through several charts with him and watching him and asking, okay, well, okay, so when you put the Fibonacci lines on your chart, how do you do that? I was like, well, here, you know, just do like this. I'm like, okay. And so, you know, we'll pull up another chart and he does it. Pull up another chart and he does it. We'll pull up another chart and he does it and I'll pull up like the first one we started with. And he puts chart. He puts the lines on there, but he put them on there differently than he did the first time. And the thing is, how he put them on there was not really clear in his method. He just was kind of doing it. Now. He wasn't breaking any rules because, you know, his rules said, you know, put the Fibonacci lines on the chart. And so that's what he did. But there was kind of a built in inconsistency because we went through the cycle a few, a few times. And I let him know. It's like, dude, we did this one chart four times and you put the lines on there four different ways. Each time you put it on there a different way. And he's like, really? I'm like, yeah. And he's like, wow. And I'm like, so you need to figure out what you're doing there because, you know, you're using your rules to make your decisions. You know, you're saying, okay, you know, when we hit the, you know, the 0.5 or 0.62, you know, this is when you want to. This is when you're making your decisions on what to do. And if your lines aren't in the same place on the same chart, how's it going to be the same, you know, consistent across, you know, a changing chart. He's like, wow, yeah. And we found that and five other things that he was doing that were, it was, like I said, it was just built in inconsistency because the variability was okay within his rules. He wasn't breaking his rules, but it was just kind of built in. And again from it all comes down to the foundational premise that your strategy is not your system. The strategy is the premise that you're planning on making money with. It's your strategy, it's how you plan to get in and out of the markets and make money. Your system is, how am I going to do this day in and day out? Hopefully, if it's a good strategy, I want to be able to do it hundreds or, you know, maybe even thousands of times. Because if it works and it makes me money, I want to be able to do it a lot. How am I going to be able to do that, you know, many, numerous times, consistently. And that's your system. So you can have a great strategy, but if your system has issues, like I said, it has some built in variability, built in inconsistency, you're not going to get consistent results. And that sucks again because, and almost nobody's aware of this, you know, you can say, well, I have rules, okay? But that doesn't mean that your system as a whole is a solid system. And that's where I help a whole lot of traders is fixing that kind of stuff to make sure that your system, it's a good system, it produces highly repeatable results. Again, quality assurance is having a solid process where you know the output, it's not up, it's not left up to chance. We know the output and that's where, that's where it's so perfect for trading. Because we're dealing with a dynamic environment. The charts change all the time. You have, you have the built in uncertainty in the markets. You never know when an event is going to happen that triggers a response in the markets. But if you think about it, you know, the better you can dial in your system, the better off you're going to be. Yeah. As far as the things that you know can cause or contribute to the built in inconsistency, again, being a quality engineer, I know what these are and I've got a list. There are actually 11 different things that can be creating inconsistency in your system itself within the rules. I mean, you know, said as far as, you know, he's putting on his Fibonacci lines. That was just one example. There are a whole slew of things that could be screwing you up that are causing built in variability, built in inconsistency in your system itself that you're not even aware of. So you know, it's just, it's crucial if you want consistent profits that you get this taken care of. If you want to have a system where or it's a process where you know what the output's going to be, you know, you know, then it's something that you really do need to address and, and I can help you make that happen. Now, like I said a few minutes ago, so we've got these three areas, right? You got, you know, your built in inconsistency which affects the other two. Again, it's not always just, you know, purely psychological matter as far as deviating from your system, making changes frequently to your system. It's not purely psychological. There are practical aspects to these other two areas as well. Along with of course, you know, how you have your system constructed, you know, does it have built in inconsistency? So these three areas, you know, there are psychological impacts and aspects and practical impacts and aspects. I mean the second one, like I said, if you're training from memory and that's what part of what is facilitating you making changes all the time, sometimes changes that you're not even aware of. Well, that's where being able to or having your system documented is such a big deal. At least you have that reference. So two weeks from now, things aren't working. You're like, am I doing something different? You can go back and look at your document. Huge. You might say, oh, wow, yeah, I forgot, I've been forgetting to do this or whoa, God, I didn't realize that I changed that. And so that by itself can be a huge thing. But. And even with the deviating from your system, there's a practical aspect of this as well that has a psychological impact, you know. Yes, of course, having your system being well documented and it's solid system, there are other things even beyond that that impact your ability to stick to it. And for example, one of the things is plain. Are you deviating partially because you have doubt about your system? There's some lingering doubt that floats around in the back of mind. That's something that can be addressed in a practical way. I mean, you know, how do you establish confidence with something if you've been struggling, if you've never had a profitable month? So how you establish confidence is a practical matter, it's not just psychological. So if you'd like help with these, you're not sure what to do. So you might inside out trading and book a call with me and we can discuss, you know, what, what you're experiencing, you know, what, what you're wrestling with in particular. Is it, you know, is it just deviating from your system? Is it, you know, you're making a lot of changes, Is it, you know, some built in inconsistency? Like I said, there are different things that can be contributing to your not getting consistent profits. So we can talk through what you got going on and see where the actual problem, you know, root causes are again, you know, what's actually going on and what to do to fix it so that, yeah, you can get those consistent profits and settle down and you know, have more confidence. So if you'd like to do this, you know, between my inside out trading, book a call with me, it's free consultation, be more than happy to help you out. We'll get, you know, we'll get things sorted out. Best path, you know, to move you forward and if you would also in the meantime, if you found this helpful, you know, go ahead and subscribe to my channel and share this with your friends. You know, if they trade and they, you know, they're struggling with some of these things, they'll thank you for it. So again, I hope this has been helpful. We'll talk to you soon. Cheers.