Reason why most Traders never become Profitable?

The most common mistake any trader makes which makes him inconsistent is “SYSTEM HOPPING”. System hopping means that a trader keeps changing his/her trading process. or indicator, entry/exit criteria all the time, without sticking to one process and improving it.

Why do traders change systems? Fact, traders don’t like losses. The movement we face 2-3 continuous losses, we start doubting our process or strategy. We are always changing strategies to find the ultimate HOLY GRAIL that will give us unlimited profit and make us MUKESH AMBANI. But does trading work like that?

Confession: Like everyone, I also used to system hop in my initial days when I faced 2-3 losses in a row. New traders keep changing system because they don’t know the reality or they don’t want to know. New traders don’t understand the purpose of losses and have wrong believe that a good trading strategy should only give profitable trades. In reality if traders can objectively look at their trading, they will see that their trading method might be performing well but THEY are the reason for their final failure. Remember, the weakest link in any trading strategy is always Trader himself. System hopping ensures that you will fail forever. Every time a trader jumps from one strategy from one strategy to other, they start from zero again and all the progress made up till that point is lost. If you win two times, then after losing three times you move on to the next system, you will never make it is as a trader.

Have you ever seen a successful businessman change his business model every week?

Persistence is key to anything we do in life. The only persistence most people have in trading is that they try a new system every few trades. If you want to keep trading like this, I suggest you go to the casino and start shooting some dice; it’s way more fun at least.

How to overcome SYSTEM HOPPING? Choose one system and one setup and stick with it. Learn it and love it understand it in and out. Back test it thoroughly and see the result. This will help you to know the no. of losses in a row you can face if you use it in live market. And when you have done this you will have found a trading system that produces consistent results over and over and you will have the confidence you need to trade that system even after experiencing multiple losses in a row because you know in the end that the system works and it’s profitable.

So, it all ends with a proper well backtested trading system. To become a successful trader, understand all these things and start trading with a proper plan, strategy, and mindset. When you have right strategy and process, trading becomes simple and you will get trading success for sure.