Steps to become profitable

Of all the things I did on my quest for consistent profitability, there were several that were harmful (such as trading live without a well-researched and tested trading plan).

Here are the steps that contributed to consistent profitability, listed in the order they should've been taken:

1. Research trading ideas by compiling statistical data over time through varying market environments (trending, ranging, chopping, calm, and volatile).

2. Develop entry and trade management rules for the ideas that indicate the highest odds of success.

3. In a simulated real-time environment, test these mini-plans.

4. Continue to study and tweak based strictly on statistical data, not on bias or feelings.

5. Discard any ideas that are not consistently profitable after commissions and slippage.

6. Practice trading the remaining ideas in sim for a period of time sufficient to have offered all the common market environments listed above. If you have difficulty following your trading plan, code the ideas into an automated trading system.

7. Trade live with smallest size, and size up accordingly as your account grows. If size affects your ability to follow your plan, trade small again, and consider automating to avoid "Thinking While Trading".

While practicing in sim, I highly recommend reading Mark Douglas' Trading in the Zone several times with a month of trading experience between readings.

I personally found the best trading ideas come from studying price action. A thorough study of price action reveals edges that do not degrade over time. The reason is that basic human nature is unlikely to change in your lifetime; it certainly hasn't changed much at all throughout recorded history.