What is more important in trading, profitability or stability

Online trading attracts a significant amount of users first and foremost because it is a great opportunity to earn a large profit. Yes, of course, you can earn a sizable profit from one contract and in principle, it is not hard. However, that’s just lucky, it’s like winning the lottery. Hence, many experts say that profitability alone isn’t a goal market participants should strive for. Your end goal for trading should be stability, a stability that will lead to the dynamic growth of your capital. On this note, it is widely debated which is better in trading, short-term profit and overnight success or stable trading that produces results. Let’s examine this question together. This will without a doubt be useful for every online investor without exception.


Profitability and stability in trading


So, let’s begin our analysis of the advantages and disadvantages of both profitability and stability in trading. Of course, it isn’t right to separate these concepts, as in both cases we are talking about getting results. Therefore, to clarify the concept, when we say profitability, we mean earning a large financial profit from a contract with an increased level of risk, decided on the basis of the trading parameters of individual investors based on their statistics. And, of course, in terms of stability, we mean generating a specific amount of profit in the medium-term to long-term perspective. As you can see, the end result is profit either way, although the benefit comes from how it is generated.

The following situation can be taken as a practical example of stable and profitable trading. More than likely, every trader online has encountered the success stories where an average online investor, overnight or in a day, earns a hundred or even a thousand percent or a six-figure profit from a single contract! There are other stories as well where, for example, professional investors trade profitably for 100 days, meaning that they generated a minimal, although maintained positive result over a long period of time. What do you think, who is the more successful trader on the market? Of course, beginners would say that it is better to make millions right away than toll away on the market for ages. However, experts say that it is better to generate profit stability! Here lies the difference between professional and successful traders from inexperienced market participants.

The problem is that, when articles are published, no one ever goes into the overall statistics of these lucky individuals. Of course, large capital growth definitely happens in trading, especially when working on highly volatile markets or during major collapses and rate spikes. For example, in 2008, at the beginning of the international crisis, an entire portfolio of international currencies collapsed. If you looked into the history of the market, you would see how within the span of a week the GBP/USD lost more than half of its worth. When heavy leverage is used and significant investments are made in a single contract, it is possible to earn an impressive amount of money, as a number of traders have done. The history of stock market collapse repeated itself in 2014 and 2018. In this period, even beginners can generate significant capital! That being said, as you can see, there are large lapses of time between highly-lucrative trading periods that aren’t profitable in such a way. Unlike these “lucky” individuals, experts strive for stability and profit all the time they work on exchange platforms! And on that note, it is important to mention that, while their stories are portrayed in the best possible light, the vast majority of traders who produce such impressive result eventually lose every penny of it. The reason for this lies in their less than professional approach to trading and the psychological problems that arise with earning a large amount of capital. A bit further into the psychological aspect, the issue is that achieving success gives you confidence. This is a very negative factor in terms of trading on the market. When an investor is so confident in their exceptional nature, they make mistakes, often involving risk and capital management, as well as effectively conducting technical analysis. As a result, large amounts of capital quickly dissolve.

In general, it isn’t great to brag about significant results among traders, as it is well known that money is drawn to calm. A more attractive and professional goal is to demonstrate stable trading results. We’d go as far as saying that you can tell a lot about an active trader from their investment chart. Gradual capital growth that moved up stably without any large losses or spikes up looks more attractive than a chart with high peaks and subsequent critical losses.

If you are new to trading, we recommend striving for stability, rather than short-term success. It is better if you increase your capital stably over an extended period of time, let’s say $200, improving your professional skills and the quality of your trading than to accidentally earn a lump sum of profit. In this way, you are investing in your future and you can calculate more accurate trading signals.

When considering the benefits of stably generating income, it is important to note the drawbacks. In this case, there is only one point of contention, the increase in capital isn’t dynamic. Of course, earning minimal profit growth isn’t all that interesting to any investor, although when you take stability into account, as well as overall statistics from a long-term perspective, it isn’t all that much of a drawback.

The conclusion thus far is that, without a doubt, you prove your level of professionalism as well as the quality of your work on the market when you generate profit stably, rather than achieving success overnight. Yes, when you achieve astonishing success short-term it is great, however, when your focus is on the long term, you can earn even more! Once this is clear to you, we have the following recommendations for you to help you generate a stable profit:

● You never stop learning throughout your career, you will generate a reliable profit on the market if you gradually polish your trading skills and expand your experience. Trading is a complex process, both in technical terms, as well as intellectually. You can never fully master all the nuances of working with financial assets. Therefore, if you want to consider yourself a professional, you need to continuously strive for self-improvement.

●Use a multitude of analytical approaches and strategies when you trade. The issue is that, on the market, price fluctuation is both unstable and volatile. Occasionally it is possible to forecast the relatively chaotic movements involving sharp volatile rate reversals. Therefore, there is no way whatsoever to generate signals stably in a long-term perspective only relying on one strategy. There is no one system that fully takes into account all of the possible situations you can find on the market, meaning that having a restricted selection of trading systems negatively affects your trading stability. Here, it is recommended that you develop an entire arsenal of analytical approaches for yourself, which should include systems based on both technical and fundamental approaches such as, trading based on trends, chart levels and market figures, candle pattern systems and price level strategies, wave patterns and utilizing indicator services, and trading the news, the leading fundamental approach to analysis. You should have a quality selection of trading at your disposal that accounts for all situations and market variance. This way, you can not only generate stable trading results but also improve upon your professional skills and expand your experience

● Set realistic goals for yourself, the first mistake trader make is setting unattainable trading goals. Many traders dream of earning a million trading in a month, but that is completely unrealistic. It also creates a myriad of problems for investors, first and foremost psychologically, disrupting their emotional state and decreasing stability when trading.

● Set yourself realistic goals and methodically work to achieve them. For example, identify the minimal capital growth you expect from yourself in a day, ideally up to $200. Trade using an effective system with which you can reliably achieve this trading indicator. Other than that, be disciplined about clearly setting your trading tasks for the day, giving you the opportunity to manage your capital.

● Don’t take risks, unwarranted trading risks are the enemy of trading stably. With a larger contract, you risk even more significant losses that have the potential to completely change your trading indicator and cause you to lose your entire capital. Therefore, to achieve overall stability trading and meet your daily trading goals, we recommend that you adhere to the basic rules of money management. Professional traders advise investing no more than 5% of your total operating capital on anyone trading position on the financial market. Following this, you can only generate profit stably, however, at the same time you are setting up the safest trading conditions for you and your capital.

● Celebrate your progress, trading is a very interesting process and not only because you have the opportunity to earn real money. Trading is a daily intellectual and psychological challenge. That being said, if you ate stably achieving your set goals, you need to celebrate that fact. You are now included in the 10% of successful traders who are capable of generating a stable profit on the market. It isn’t a secret that 90% of all traders lose capital, and you are earning stably. Use it to motivate yourself to work towards further professional growth.

● Don’t ever compare yourself to other investors. When working on the market, you can encounter various approaches to successful trading, including generating multi-million-dollar profits in the space of a day, as well as achieving 100% capital growth. As a result, you might be tempted to follow the approach of such “lucky” individuals. However, it isn’t worth it, as such a path leads to a multitude of mistakes and large financial problems that can destroy your trading capital. Note your doubts when you evaluate your own strengths and abilities, follow your plan and strategy, and work out your own trading philosophy. This is the only way to create the conditions for stably generating profit on the market.

● Take a break when you receive unexpected results. When you trade with financial assets, despite traders’ best efforts to generate stable results, there are times when investors end up with trading anomalies. It could be a large amount of profit, or a significant loss, both situations are anomalies. If you succumb to the situation, take a break from the market. It is vital for the stability of your mental health as an investor. Some experts take extended breaks in such circumstances until they feel certain that they won’t succumb to gambling on the market or be distraught when trading.

● Listen to your emotions. Psychology is possibly the most important aspect of trading and it holds significant influence over the trading process. Therefore, in order to trade stably on the market, you need to pay close attention to your emotions and mental state. You need to evaluate your accurately emotions and mood in order to achieve your set trading goals. Therefore, you achieve a high degree of awareness when you make trading decisions and increase the quality of your market analysis and, accordingly, you more effectively achieve vital indicators.

As you can see, professionalism and trading stably go hand in hand. Traders can only achieve success on the market through hard work and continuously improving their professional skills.



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