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A Professional Trading Strategy for the Retail Trader
When I was a bank trader, I became friendly with a trader who managed an fx dealing room. He related his philosophy, which I call a professional trader’s game plan that can be used by retail traders today.
Professional Trader’s Strategy
His philosophy was to trade every day to make money on a consistent basis so that he would have a store of profits to trade from when things lined up for him 3 or 4 times a year. The strategy was to build a cushion of profits, wait patiently for the times when he saw the risk/reward worth leveraging up to make a big bet. He made his big money on those 3 or 4 times as he was able to take added risk as he was always trading from strength.
The rationale behind his philosophy was that markets spend more time in ranges than in trends. Rather than aim for the stars on each trade, he preferred to grind it out with a cache of profits and trade from strength rather than weakness when the time was ripe.
Strategy for the Retail Trader
This is an approach that would work well for retail traders. This is especially true since retail traders have a limited capital that will likely be eaten up with losses if they go for the moon on each trade.
I believe trading is risky enough without making it more risky. Traders should be content wiith whatever the market will give on any specific trade or day, whether it be 5, 10, 20 pips or miore. Applying the professional trader’s philosophy, the goal should be to look to build up a consistent base of profits so you have a cushion, even intra-day, to take a more aggressive trade when a risk/reward setup calls for it.
So the goal should be to make consistent profits. However, this is easier for a bank trader in the old days than for a retail trader today. If it was so easy you would not be reading this article.
How to Make Consistent Profits
If I were reading this article I would ask the question, If it is easier said than done, how do I go about making consistent profits?
The first answer I would give is to instill discipline in your trading. If you add up the money you lose on gut calls and undisciplined trading during the month you would be amazed at how it adds up. We call this “pissing” away your money and it can be avoided with a disciplined approach.
One way to instill discipline is to get access to tools and strategies that create a structure to your trading with a goal to trade with the odds on your side. One such tool is The Amazing Trader and/or our Trade Like Our Algo Strategy Guide (includes 2 months of Amazing Trader access), which will hopefully help in your goal to build that cushion of profits and highlight the setups to “go for it” with an aggressive trade when the stars align.
In any case, this is a professional trading strategy that can be applied to retail trading.
In any case,
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