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How do I become flexible in trading?

One mark of a flexible trader is he/she has a carefree attitude when it comes to executing a trade. They don’t allow themselves to get bent out of shape over a trade. They don't sit and think over and over about their strategy. They have done their homework. They’ve developed a sensible trading plan, and when the opportunities present themselves, they pull the trigger on the trade. They don't question every trade. They don’t brag about their wins and they don't feel any self-reproach at their losses they just do the trade in a business-like manner. If the trade is profitable, they take their money and move on. If they lose they still move on to the next trade. They are aware that success in trading is being able to make one trade after another confidently with a willingness to change when change is needed. These days being able to adapt to the changing markets is essential to your success as a trader.Now that I’ve described a flexible trader I need to tell you how to become one.

For flexibility, I have one essential rule: Always, always trade within your comfort zone. You must find out where you fit into the arena of trading markets.

Being flexible not only involves your situation, but it also involves your personality. If you need to be a scalper, then be one. Simply develop strategies that enable you to make money from very short term, minimal tick or pip trades.

If you are under-capitalized, you should be extremely wary of losing money. In that case perhaps you should trade spreads, where margins are much lower than with outright futures. Short-term scalping often works for small accounts, as does writing covered options. It is essential that you feel at ease when you are trading.

There is sound reasoning behind the advice that you trade only with money you can afford to lose. Why? Why do people give that advice? It’s no so much a matter of afford-ability as it is a matter of comfort. Unless you are comfortable, there is now way you are going to be flexible.

Keeping your losses small is another comfort related piece of advice. If you know that because of your trade selection and control you have relatively little to lose, and that in the worst-case you can still recover, you'll also be assured that everything will be okay in the long run.

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Sunday, 17 December 2017

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.