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Controlling Emotions

Controlling Emotions
Winning traders cannot afford to be influenced by their emotions. The nature of trading demands an objective, logical approach. If you experience extreme excitement after a win and extreme disappointment after a loss, you will be living on an emotional roller coaster: up and down, up and down. Many beginning traders have head knowledge of what it means to control their emotions. They can imagine a...
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Don't Trade Your P&L, Trade The Market!

Don't Trade Your P&L, Trade The Market!
I just posted another video on our YouTube channel about  another very common trading mistake, and that's trading your P&L instead of the actual market. While there are many variations of this, I guess I covered some of the most common ones that I've done myself again and again when I started trading. Go check it out and let me know if you have any questions or comments!
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Fear of missing “the big one”

Fear of missing “the big one”
The best way to handle that kind of fear is walk away from the situation. Get up, and walk away from the computer and any news you may be watching. Remove yourself from whatever it is that triggered the fear. Do anything that will take you out of the fear/panic mode. Don’t sit down to trade again, and don’t return to the markets until you have managed to achieve some emotional control over your fe...
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Important Alert

Important Alert
  Dear Investor,   On 23 June 2016, the United Kingdom EU Referendum (“Brexit” vote) will take place, creating potential for heightened market movements, including the real possibility of significant price gaps and periods of exaggerated illiquidity. It is important that you be aware of the potential risk of this upcoming event, so that you can be both prepared and positioned properly as...
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Becoming a Perfect Trader

Becoming a Perfect Trader
As traders we have a strong need to want complete control over the outcome of a trade. We want to believe that if we analyze the markets long enough, we'll have perfect knowledge and we can trade to perfection. But such desire leads to wrong assumptions that can do us more harm than good. Assuming we must have control restricts our actions and reactions, and the result can be unnecessary stress. W...
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Recent comment in this post
Jean1975
In trading you can only control yourself and the risk amount which you a willing to take. Outcome cannot be controlled. Better to ... Read More
Thursday, 26 May 2016 07:53
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Walk-Forward Testing

Walk-Forward Testing
Walk-forward testing is the first real step in testing any system on live data. A trader should be somewhat confident that the system or method can produce results in line with the hypothetical results received from back testing. At this stage of testing, it’s important to watch a trading system or method run over live data for a period of weeks or months until a large, statistically valid univers...
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Trading Error: Stop Trading At The Worst Time...

Trading Error: Stop Trading At The Worst Time...
I just wanted to let you know about a new video that I uploaded to YouTube about one of the most common trading mistakes out there: To Stop Trading/Following your method/system/yourself at the worst time possible. This is something I see over and over again especially among beginning traders. You won't believe how often I've trapped into this myself during my first years of trading! Happy Trading!...
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After closing out a trade

After closing out a trade
Once you have closed your position, you should record everything about the trade. Write down where you wanted to enter the trade, what you expected out of the trade, and what you actually did get out of the trade. Make sure to include notes that will help you learn from the trade, reasoning what actually took place once you entered the trade. Explain why the trade was a winner or a loser. If you k...
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Thoughts about being an option buyer

Thoughts about being an option buyer
An option buyer has the odds strongly stacked against him. What most option buyers don't realize is that in order for them to make money, they must be right in three areas: He has to be right about market direction He has to be right about the degree of market direction He has to know when the market move will move in a certain direction That is definitely worse than being a trader in the underlyi...
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How much to risk per Trade

How much to risk per Trade
One of the questions every trader has to think about at some point is, how much of my account should I risk per trade? A percentage? If so, what percentage? I’d love to have the right answer in my pocket for you, like "exactly 1.25% per trade/market and no more than 5% at the same time," but unfortunately, I don’t. Again I know you don’t want to waste too much time with this bo...
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Recent Comments
Jean1975
Great post. In my humble opinion carefully managing risk with a proper position sizing and shutting down quickly the losing trades... Read More
Thursday, 12 May 2016 15:48
Marco Mayer
Thanks Jean! Unfortunately posts and videos about anything related to risk-/money-management aren't the most popular ones. So I'... Read More
Friday, 13 May 2016 02:28
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Multi-Leg Spreads

Multi-Leg Spreads
Not many traders are familiar with futures spread trading. Even fewer traders understand multi-leg spreads. However, trading these types of spreads is as easy as trading an outright futures contract. Below is a 3-leg butterfly spread in Lean Hogs that we recently closed out in Traders Notebook : short one contract in June and in August, 2016, and long 2 contracts in July, 2016. The blue line on th...
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I'm still alive--woo woo

I'm still alive--woo woo
Really, I'm still kicking. I've been busy in the deep South--South America, that is. But just so you know, I look at or trade the markets every day. It's simply a long time habit. The markets tell me what's going on in the world. In addition to trading, I'm involved in building affordable housing, and working with CAIF, which is an organization that helps the poor. Next time I feel like blogging, ...
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Bollinger Bands in a Nutshell

Bollinger Bands in a Nutshell
Markets move between low volatility trading range moves and high volatility trend moves. One of the best ways to see this taking place is with the Bollinger Bands. When a market makes an extremely narrow range move the Bollinger Bands will noticeably narrow together. When the bands narrow down it shows decreasing to low volatility condition on prices. Of course, a low volatility market forecasts a...
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New Q&A Video Online

New Q&A Video Online
I just uploaded Episode 3 of my Questions & Answers Series to YouTube. It covers questions on the usefulness of demo-trading and on trading 123 formations. In the last part I talk about why I developed my own python-based backtesting platform which is probably only interesting for those of you who're hardcore into system-development. So if you're not, just stop there ;)
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3-leg Butterfly Lean Hogs Spread

3-leg Butterfly Lean Hogs Spread
I've got asked a few times about the 3-leg or butterfly spreads we have been trading in Traders Notebook and therefore I want to show you one of our latest trades. What you can see on the seasonal chart below is a butterfly Lean Hogs spread, long 2 contracts in July and short 1 contract in June and 1 short in August. We've entered the spread on June 30 at 0.0 (red arrow), we covered some contracts...
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EUR/USD Update

EUR/USD Update
The last I did a post about what's going on in EUR/USD and that it's unlikely we'll see a significant move unless the pair breaks out of it's established range. Now that finally happened and the Euro is on a strong run for a few days now already. Now what to do? If you're already long, should you keep on holding the position? If you're not in the trade already, should you still buy at the market? ...
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Position Sizing/Measuring Performance

Position Sizing/Measuring Performance
About a year ago I wrote an article about  measuring performance  where I explained the concept of measuring trading performance in Rs instead of $s. Everyone who trades for a while quickly realizes that $s don't really say too much about performance. You made $10? Maybe great. You made $50.000? Maybe not so good. The question always is in relation to what? What account size does the tra...
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Can I really make it as a trader?

Can I really make it as a trader?
You alone determine whether you will succeed or fail at trading. You alone are in control; take responsibility for your performance and your life. There are always tremendous opportunities in the markets. It is not what happens; it is what you do with what happens that makes the difference between profit and loss. However, you cannot marry a market or a single trading style. You have to look. Look...
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Trading Idea for 04/28: Long Jap. Yen

Trading Idea for 04/28: Long Jap. Yen
As you can see on the chart below, the 90000 level is an important one. It was a clear resistance level in February and March of this year and could now work as support. I'd try to buy the June Japanese Yen one tick above today's high using the TTE with a first target at around 90470 with the idea of a possible 1-2-3 low. I would risk about $300/contract on the trade. Update 04/28, 6 AM CT: The Ja...
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Genesis Trade Navigator FX Data issues and how to fix them

Genesis Trade Navigator FX Data issues and how to fix them
Since many of you are using Genesis Trade Navigator, I thought this might be of interest. I personally use TN mostly for Futures Data, and only sometimes for Forex data - when I just need a quick daily chart for example where I don't mind about a few pips difference. But I don't use their spot Forex Data for backtests. Last week Genesis changed the daily closing time of their FX data to 17:00...
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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.