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Overtrading

Overtrading
Overtrading is putting on trades unnecessarily, arbitrarily, and without a specific trading plan. Overtrading can also be trading with more risk than you can afford, and trading more contracts than you can effectively manage physically, mentally, and emotionally. Mistake #1: Assuming a real trader trades all day. Mistake #2: Trading for excitement. Mistake #3: Trading because you are frustrated. M...
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Some things that keep traders from “making it”

Some things that keep traders from “making it”
Three psychological traits prevent traders from becoming consistently successful, fear, anger and guilt. Fear blocks the trade decision making process due to worry about negative events that may or may not occur in the future. Guilt blocks the trade decision making process with unresolved concern about something that happened in the past. Anger is an emotional response to guilt, fear, the indecisi...
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Developing a Trading Style

Developing a Trading Style
Master Traders develop a style that is a reflection of their education and character. Most individual trading styles are either positional or combinational and, rarely, a synthesis of both. However, there are other styles.  Positional traders take x amount of positions within a specific price area where the market is thought to be favorable to their trading strategy. This may occur on short ...
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What kinds of emotions go with winning and losing?

What kinds of emotions go with winning and losing?
Once a trade is entered, there are two possible outcomes: Win or lose. Between the two is the breakeven point, and because it is in-between, it’s psychologically significant. Losing is involved with fear and hope. Winning is involved with greed. When on the losing side of a trade, the breakeven point is a place that inspires hope. Being human we have a natural tendency to avoid risk and loss. Whe...
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How do you go about making trading decisions?

How do you go about making trading decisions?
Careful analysis of all possible alternatives and all possible consequences of your trading decisions is the first step in good decision-making. Make every attempt to avoid impulsive trading decisions, invariably these lead to taking unnecessary risks. Strive to have a clearly defined trading plan, but keep it as simple as possible. Chart the equity of your trading method so that you can quickly k...
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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 preperation 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.