The Meaning Of “Consistent Profitability”

The Meaning Of “Consistent Profitability” - Trading Dispatch

In the Forex trading industry, “consistent profitability” is used so often, the actual meaning can become blurred.

It has become a phrase people use to pounce on newbie traders so these innocent traders can buy their course, lose thousands of dollars, and leave with nightmares about the Forex market.

Believing they’ll never be able to trade because “it’s just not for them”… sound familiar?? This was certainly the case for me! Now, let me just clarify – we all go through different stages when learning any new skill:

  1. Unconscious incompetence.
  2. Conscious incompetence.
  3. Conscious competence.
  4. Unconscious competence, when you can do something on auto-pilot (e.g. driving a car).

 

A lot of Forex traders give up on obtaining consistent profits when they realize the demands that the market places on them.

But if I am being honest, I think consistent profitability is subjective depending on the individual. Here is why…

For starters, in today’s day and age, we see a lot of the working class joining the Forex industry as a means to a second or third source of income.  

Over the lockdown, according to the top 5 brokerage firms, over 12.5 million newbie traders found themselves in the markets!! 12.5 MILLION NEWBIE TRADERS!!!)  

For these people, consistent profitability may mean making a couple of hundred dollars above their salaries.

The best way to describe it is –  A consistently profitable trader has the skill to make money from the markets over a long period and live off of that money to some extent. This idea of being consistently profitable came to me from a fellow Forex trader I consider a mentor.

He simply said to me “Emmanuel, if you cannot pay for all your expenses through your trading month to month, you aren’t consistently profitable”.

Now to many, this is a controversial opinion because you cannot predict how much the market is prepared to give you as this is a game of probabilities. A numbers game. Right?

This is very true. It is a numbers game, but you also get traders who have developed a method which allows them to extract value from the markets, daily.

What do you think the banks are doing for 240 days of the year? EXTRACTING VALUE FROM THE MARKETS, WITH YOUR “SAVINGS AND INVESTMENTS”!!

What does it mean then?

Consistent profitability is being able to work as your own bank and extract value daily, or at least monthly. This is why it is so important to treat this like a business because these are your soldiers at war!

I am also of the belief that consistent profitability takes time, and the amount required is different for everyone. How you achieve this will be different from other traders too! Never compare your journey to another fellow trader because that will stunt your growth.

Understand that it is okay for “consistently profitable” to mean over a monthly or even quarterly basis. But, traders need to get to this point, or else we’re honestly wasting our time. 

Different ingredients are required to cook up some consistency. All aspects of our trading will need to be at a level of consistency. From, psychology, risk management to chart work!

Mark Hutchinson says for you to be a consistently profitable trader you need to be a consistent person.

Intense words if you ask me because this means you need to be able to do most things in your life consistently without turning away or giving up. So the question then becomes, are you consistent as a person? If not, why not?

Get to a place of consistency in your life and it will play out in your trading.

Happy consistency!

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Emmanuel Maphosa

Emmanuel Maphosa

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