How to Generate Systematic, Repeatable, and Consistent (SRC) Profits

   

In this article, I want to talk about SRC profits. We’ll talk about what they are, why you must have them, and how to generate them.

So let’s get started!

What are SRC Profits?

First, let’s talk about what I see when I login to YouTube. I’m sure you’ve seen it too. 

Endless videos that show up on my feed like this one that says, “I made $1,088 in Profits DAY TRADING”.

SRC Profits

Or this video where someone is claiming, “I made $1,253 in profits in three minutes.”

SRC Profits

Wow, look at this one: “32,625 pounds in only 24 hours”

SRC Profits

And you know what? I actually believe that these people made these trades and were successful. 

But here’s the deal with trading: some trades will work out just perfectly and you will make a lot of money on them. The real question isn’t if these trades are real or not, it is if they are replicable over and over again. 

So for me, the question is always going to be: are these SRC profits?

If you want to trade for a living, you must be able to generate SRC profits. One big profitable trade will not sustain you for the long-term. 

So let’s take a few minutes and talk about this.

“S” is for Systematic

As you have probably already guessed, SRC is a trading acronym that I follow in my own day to day trading.

The “S” in SRC stands for Systematic, as in, I want to make my profits in a systematic way. 

Anyone can make money trading a stock like Tesla if you catch it at the right time on the right day. 

But that’s not the point of trading. I want to control exactly when and how to enter or exit a trade, and repeat this process over and over. 

If you’ve seen the special mug I keep on my desk, I trade by this rule: I like to trade what I see and not what I think.

This is why I use indicators on my stock charts and why I stick to my trading strategy. 

Having a systematic way of trading means we have a trading strategy that tells me exactly what to trade, exactly when to enter, and exactly when to exit. 

When you use a system like this, you’re still going to have trades when you exit with a loss. It happens! As I’ve said many times before, no trader has a 100% success rate. Losses are just a part of the business for a trader.

To sum it up, you need to have a system. I love to trade based on my rules and not my gut feeling or my emotions. 

When I was able to switch over to trading as a science and based my strategy on rules and probabilities, this is when my trading success turned around. 

“R” is for Repeatable

Let’s move on to the second letter in the SRC acronym: R is for Repeatable!

Without a good trading system, your profits will not be repeatable. To show this, I have an example that I always love to use from a couple of years back. This is when Tesla announced its stock split in August of 2020. 

So here’s the chart from back in August of 2020. Let’s say that you caught Tesla when they announced a stock split right here on August 11th:

SRC Profits

Now let’s say that after you got in on August 11th, you made about 30% in the next few days. Maybe you even traded options on TSLA and gained over 1,000% during that time. 

The profits were great, but the real question for me is: Can you do it again? If it takes another stock split to see these types of gains again, you might be waiting for a few years. For me, that is not a repeatable way to be profitable.

The way I think about trading is this: do you want to make $10,000 on a single trade, or do you want to make $500 every single week for as long as you are trading? 

For me, there is no question that I would prefer the $500 of regular profits each and every week.

Sure, windfall profits like your TSLA trade will happen and it’s a great feeling. It’s amazing when it happens, but the point is you cannot rely on it to continue to happen on a regular basis. 

If you can generate $500 every week for 52 weeks, that’s $26,000 per year. In my opinion, that is much better than irregular windfall profits from one or two big trades every year. 

This brings us to the last letter in the SRC acronym. 

“C” is for Consistent Profit

The last letter is “C” for consistent profit. I want to make sure that I’m making consistent profits over time. 

Let me give you an example here. Would you rather have an equity curve like this:

Or one that looks like this?

What is an Equity Curve?

An equity curve charts your account performance and shows you how successful your trading has been. 

While both of these charts are making money, one is definitely more preferable than the other. 

For this chart, you start at the bottom and you end up on the far right side of the chart. 

I don’t know about you, but I prefer my trading performance to not be like a roller coaster ride. 

Even if this ended up making me more money in the end, in my mind it’s not worth the stress it took to get there. 

I’ll take slightly less profits if it means I can keep my hair instead of pulling it all out!

Some traders are totally fine with this performance as long as it gets them their profits in the end. I’d prefer not to bite all of my nails off though!

So let’s review SRC profits here. 

The acronym stands for: 

Systematic
Repeatable and
Consistent Profits 

Now that we know what SRC profits are, let’s talk a little about why you need them if you want to be a trader for a living. 

3 Things You Need To Generate SRC Profits 

  1. A Trading Strategy 

The most important thing to have to generate SRC profits is a trading strategy that works. 

My trading strategy includes using indicators and probabilities to determine when I enter and exit a trade. 

By using these, I get to control the entire trade from start to finish. I know exactly what to trade, when to enter, and when to exit. I also know my risk, my potential profit, and the odds of realizing that profit or loss. 

If you’re wondering about my trading strategies, I’ll briefly go over them right now. My bread and butter strategy is the PowerX Strategy. I’ve even written a book about this so trust me when I say I know what I am talking about!

During the pandemic, I was also trading using a strategy called the Theta Kings. This was a perfect way to compliment the PowerX Strategy as the markets were crashing. 

Of course, I can’t forget to mention the Wheel Strategy which is a nice, steady way to make profits off of selling options. 

2. To Generate SRC Profits You Need To Have Tools

The second thing you need to generate SRC profits when trading? You need the tools to make your trading life a lot easier.

When I say that I know my odds and probabilities, I’m not doing these calculations inside my head. 

This is why I use tools like the PowerX Optimizer which helps me identify the best stocks and options to trade

SRC Profits

This is a screenshot of the PowerX Optimizer. 

This program shows me the signal, position size, how much I should trade, my potential gains, and how long to stay in a trade, for any given stock. 

I love having these tools because it helps me stay in control of every trade I make. 

When it comes to the Wheel Strategy, I use the Wheel Income Calculator as shown below.

So this is the income calculator that I use for picking the best stocks and options to trade in the Wheel Strategy.

When I trade, I want to make sure I’m making the best trades for my account. To do that, I want to make sure I have all of the right tools. Otherwise, it can be a lot like competing in a Formula One race while driving a Toyota Prius. 

By the way, that’s nothing against a Prius, they are great cars! You just wouldn’t do well with one in a Formula One race.

Why is this important? Because when you are trading against some of the smartest investing minds in the world, you have to be well prepared. Like I always say, don’t bring a knife to a gunfight.

 

3. You Need To Have The Right Mindset

The final thing you need to generate SRC profits is to have the right mindset when you are trading.

What exactly do I mean by this? When you trade, there will be losses and unfortunately for every trader, this is unavoidable. 

You need to know how to limit your loss because otherwise, the losses will get larger and be devastating for your account. 

Do you know what I am talking about? You need to know how to control your risk and take care of your losses because the winning trades, they can take care of themselves. 

Summary

I know this was a lot to absorb, but I have one last super important thing to say: trading is a marathon, not a sprint. 

If you made $1,088 in profits from day trading or $1,253 in three minutes, that’s great! Good for you, and I mean that. Any profits are great!

But let me ask you this: how much did you lose before that? Or how much did you lose right after you made these profits? Did you give it all back in the next trade?

I see too many traders that are blinded by these windfall profits. By the, “Hey, look at me. Look at what I did!” stories, except they don’t know the whole story. 

This is why I always want to show you the full story for trading. 

When traders don’t see this full story and just the flashy headlines on YouTube videos, they start chasing these dreams and end up losing a lot of money along the way. 

For me personally, I’ll take SRC profits any day of the week. Trading is a marathon and not a sprint, and in the long run, SRC profits will be what makes you a successful trader. 

If you enjoyed this article, feel free to leave a comment below and share it with anyone you think may find this helpful.

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