Patterns to Profits

In a follow up to our last post about patterns of losses in trading, you also have patterns to profits. When you have a winning trade, or a series of winning trades, have you taken a look at your trades to see what you did to create that series of wins? You will find there are common denominators between all of your winning trades.

You will see there are patterns to your profits as well as your losses. Finding your personal profit patterns will add to your bottom line while minimizing stress. We are talking about “behavioral patterns” as well as technical patterns in your trading and the same questions you asked about your patterns regarding losses applies here too. Were you patient? Were you disciplined? Were you well rested? Were you relaxed? Was it one particular setup out of the 2 or 3 you might trade that seemed to produce the profits?

Looking at Pareto’s Principle which says “20% of what you do produces 80% of your results”. This is a concept I teach every day to our students. It’s not what you do but how you do it. It’s quality not quantity that makes the difference. If 1 setup or strategy is producing the bulk of your trading profits wouldn’t it make sense to focus on that one setup and make that trading strategy your “premier” trade that you know has an extremely high win rate? That’s what we do every day. There’s no need for multiple setups and strategies. Focus on that one thing that leads to your greatest profits day in and day out. That is the pattern to your profits.

Eliminating the other strategies or at least minimizing them in your trading also makes sense once you identified your best pattern to profits. This also in turn will reduce your trading frequency. At the same time, your trading stress levels will go down dramatically. You have cut out strategies that are minimal producers relative to your premier setup so you will have greater confidence in taking your trades which equals a more relaxed mindset when trading.

Don’t underestimate the power of only trading one strategy or setup. It’s far more profitable than most traders realize. The added bonus to approaching trading from a “single strategy” perspective is you free up a lot of your time in between trades. You are not glued to the screen watching every tick. When you combine a simple one strategy approach with our Time Window Strategy trading takes on a whole new light.

In trading “less is more”!