Adrian Reid argues that trading consistency comes from two linked practices: (1) defining objective, absolute trading rules (e.g., "if A and B and C then buy; if D or E then sell") so discretionary judgment is removed, and (2) building confidence in those rules via rigorous backtesting — running rule logic in software (e.g., Amibroker) across decades (10–30 years) and thousands of stocks to generate large numbers of simulated trades. He contrasts this systematic approach with the repeated cycle of blowing up accounts through discretionary trading.
Chapters
Key to consistency is A, having rules which are objective so they take the discretion decisions. Again, back to if A and B and C is true, you buy. If D or E is true, you sell absolute rules where you don't have to say, okay, should I buy, shouldn't I buy? You know, you want to know. Absolutely is why. Absolutely. It's a sell, no questions asked. You could do it almost blindfolded. So that's the first thing. Second thing for consistency is testing those rules enough so that you have the confidence to keep following them. And when you've done that.
You can just follow those rules time and time again. Trade off to trade. So there's a couple of steps to building that consistency. It starts with having objective rules, but it really comes down to building confidence in them through backtesting. And when I'm back to when I talk about backtesting, I don't mean looking at the charts and saying, okay, well that would be a buy and that would be a sell and there's another buy and there's another sell. That's not what I'm talking about. What I'm talking about is putting your rules into a back testing software, something like Amibroker, and running those rules over 10, 20, 30 years of market history. And in stocks, I do it over all stocks in the market, so over thousands of stocks. So I'm getting thousands of trades over decades of market history across thousands of different stocks to test that, that entry in that exit and that position sizing method actually works.
So that's, that's what it takes to build consistency. And you know, it takes some effort to do that, but it's far less effort than it is to blow up your account and then work in your day job to save more money and start a new account and blow that account up and then working your day job again to save up more money and blow up that account and start again and so on and so on. You know, you can start and after a couple of weeks of good solid training, you can be trading systematically, consistently and never have to worry about destroying an account again because you know how to manage your risk, you know how to trade consistently.
