Whether you are already consistently profitable or are a breakeven trader struggling to achieve consistent profitability, there will come a time ( or many) in your journey, when you feel that all the effort you are putting into trading is not providing that steady improvement in results that you instinctively know you deserve.
If you’ve been trading for any bit of time and have stopped seeing improvements in your trading or your results have started to “flat line” then you are likely at a plateau in your journey – you will know this to be true because you will almost feel “stuck” with a certain result or lack thereof.
Plateaus can be extremely frustrating to deal with so if you are going through one in your current journey, then this episode is meant to help you understand this process so that you can break through it and level up your trading!
So what is a plateau? It’s a state of little or no change following a period of activity or progress.
As it relates to trading, an example might be a trader that can consistently make $200/day but when they try to increase their daily profit target to say $400/day, they find themselves really struggling to produce similar results.
Or a trader struggling to find consistent profitability that can locate great trades but manages to fumble the trade management leaving them with less than desirable results.
When a trader reaches a plateau, they effectively have two decisions that they can make:
- Develop the mental edge to level up
Let’s break this down in more detail:
When a trader starts their trading journey, they are in it to win it and they tend to see results relatively quickly – these results aren’t necessarily profits at first, but they are signs of improvement – such as learning to identify market structure and planning out trade ideas to seeing those trades playing out as per their analysis.
After some time learning this they will take to sim trading to practice their strategy and that might go well for them too – leading to funding their first live account!
The journey up until this point is rewarding because there are steady improvements that the trader can observe which offers further motivation to keep pursuing the goal of consistent profitability.
However after some time in the live markets, the results might not be the same as what they were in the demo because real money is on the line! So now instead of seeing daily improvements and feeling good about the progress, the trader may start to focus on their results (or lack thereof) and get discouraged because they are not making money – in fact, they are losing money and confidence.
This is a normal part of the journey and the unfortunate reality is that a lot of retail traders never really give themselves a real chance at success before deciding to quit at this point.
However those that endure this stage are the ones that double down on their efforts and continue to push forward towards their goals regardless of their current results; Those that get frustrated stop working as hard or eventually quit.
This same thing is often seen in athletes that make massive improvements in their performance early on in training or in the active season only to see these improvements slow down or even come to a halt as the season progresses.
Do these athletes quit? No – that’s not even a consideration! Instead, they focus on making small changes that will help them overcome the plateau in order to level up and that’s exactly what we’re going to discuss next!
Steps You Can Take to Break Through a Trading Plateau
- Understand the process; improvements and progress are often followed by regressions and plateaus, this is a natural cycle. To break through the plateaus will require some growth and will lead to another period of improvements that will eventually taper off again and lead to another plateau. IF you cannot accept this fact then you might want to reconsider trading!
- Do Not Be a Complainer; If you are sitting around and complaining about your circumstances or challenges then you are living in effect of your external environment and giving away control to make the required changes; shift to living at cause and working towards abundance
- Your Biggest Improvements Happen When You Are Not Trading: The biggest strides in your journey happen not when you are actually trading but what you do with the time when you are not trading! If you hit a plateau in your trading, then you should be spending time outside of market hours working on your trading plan,studying and reviewing your trading journal to find strengths and weaknesses and inefficiencies that you can optimize to get you to the next level.
- Watch The Markets; Just like athletes review game tape to understand their opponents, you should take some time to just watch the markets without actually trading in order to recalibrate and get a pulse on the markets. When there is no skin in the game it affords you the opportunity to observe the market objectively and identify where you might be going wrong in your approach.
- Find a Mentor; Just like tiger woods has a driving coach and steph curry has a shooting coach, a mentor can help you overcome trading plateaus by identifying your strengths and weaknesses and working on these
- Consistency is KEY – The most important thing in busting through trading plateaus is to create a process and stick to it regardless of the short-term results; when you only focus on the results, you cloud your judgement , instead focus on the process and executing it flawlessly.
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- Catch up with our earlier episodes: Mind Over Markets Podcast