Five Steps To Consistent Profits

I'm often asked how to become a consistently profitable trader. Recently, Tharp outlined five simple steps to consistent profits:
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asr: 11. Trading success is a function of possessing a statistical edge in the markets and being able to exploit this edge with regularity

- read the above word by word here is dicect
a) possessing a statistical edge in the markets : it takes at least 6 months to 1 year to JUST realize this fact ( after many losses for many people )and then another 6 months to find edge ( in my case. with observing Mr. K i realized what is his edge)
b) exploit this edge with regularity : the regularity is key , how can you do it . in case of Mr. K he has stock machine screens that screen stocks he wanted to trade in future and setup alerts when certain criteria is met and have UPFRONT prepared notes to ACT when such alerts are triggered ( not thinking what to do when alerts are triggered).
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1. Work on yourself and your personal issues so that they don’t get in the way of your trading. This step must be accomplished first; otherwise, it would interfere with each of the other steps.

2.Develop a business plan as a working document to guide your trading. This business plan is not to raise money, which is the purpose of many business plans. Instead, it’s designed to be a continual work-in-progress to guide you throughout your trading career. The business plan actually helps you with all five of the steps. The plan also includes an overview of the big picture influencing the markets you will be trading and a method for keeping on top of those factors so that you will know when you are wrong.

3.Develop several strategies that fit your view of the big picture and understand how each of these strategies will perform under various market types. The ultimate goal of this step is to develop something that will work well under every possible market condition. It’s actually not that hard to develop a good strategy for any particular market condition (including quiet, sideways). What’s difficult is to develop one strategy that works well under all market conditions—which is what most people attempt to do.

4.Thoroughly understand your objectives and develop a position sizing strategy to meet those objectives. Probably less than 10% of all traders and investors understand how important position sizing is to trading performance and even fewer understand that it is through position sizing that you meet your objectives. Thus, the fourth step is to develop position sizing strategies for each system that will help you meet your objectives.

5.Monitor yourself constantly and minimize the number of mistakes that you make. I define a mistake as not following your rules. Thus, for many people who have no written rules, everything they do is a mistake. But if you have followed the first four steps, then you will have rules to guide your trading and you can define a mistake as not following those rules. And, of course, when you repeat the same mistake over and over again, then that is self sabotage. However, by monitoring your mistakes and continuing to work on yourself, you can minimize the impact of such mistakes. People who do this, in my opinion, will tend to produce consistent, above average profits."