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Trading Educators Blog

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Jan
13

One Market or Several?

One Market or Several?
Why do traders bail out of some markets to go to other contracts? Wouldn't it be better to learn one market and stick with it? The main reason traders bail out of a market is that they are not making any money. This has happened in various ways. In the currencies in the 1990s, for instance, lot sizes became too big for the market movers to fade (take the opposite side). The big players did not wan...
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163 Hits
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Jan
06

Advice for Long-Term Traders:

Advice for Long-Term Traders:
Take note the yearly ranges for the commodities you trade. What are this year's highs and lows? Are they higher highs, lows and closes compared to last year? Does the close confirm the price action? What is the long term trend? How does this year's average price range compare to the last three years' average range? Should next year have greater volatility than this year? How much in dollars was th...
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231 Hits
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Dec
30

Trade Management Method

Trade Management Method
Rather than seeking miracles from mechanical trading systems, I suggest seeking methods and setups that are proven to work most of the time, and learn to stop trading them when they are not working. There are methods and setups available that work from a medium to very high percentage of the time according to how much you try to extract from them. At Trading Educators, we believe in seeking small ...
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203 Hits
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Dec
23

No Stops

No Stops
Would you agree that the most annoying event in trading is the running of your protective stop? Did you know there is a way to prevent this from ever happening? Do you find that you miss a lot of really good trading opportunities because you simply do not have sufficient margin to allow you to take advantage of these opportunities? What if I could show you a way to be able to leverage your margin ...
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300 Hits
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Dec
16

Complete Approach

Complete Approach
Hey Joe! I'm an intermediate-term trader in the e-Mini S&P. I'm trying to fill out my trading method so that it is a complete technical trading approach. Do you have any thoughts on this? Following is a technical trading answer: A complete trading approach should equate about two or three weekly intermediate tops and bottoms per monthly major top and bottom movement. About the same number of s...
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377 Hits
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Dec
09

Military Tactics and Trading

Military Tactics and Trading
Grant and Napoleon had an ability that separated them from other generals, the ability to maneuver troops and supplies to their most effective placements under rapidly changing circumstances. Traders should learn how to manage their funds, rework stop placements, and change their position size with changing market conditions. Conducting warfare and trading have many common factors. All modern warf...
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289 Hits
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Dec
01

Should You Trade Only One Market?

Should You Trade Only One Market?
Restricting your trading exclusively to one market may not be your best choice. Here are some reasons why: You must not trade under pressure. Trading involves being eclectic and choosing only the best, most clear-cut trades in liquid, not overly volatile markets. It is sheer folly to trade feeling that you have to make a certain amount of money each day, or that you have to make up for a previous ...
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292 Hits
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Nov
18

Approaching the Markets

Approaching the Markets
I recently received this letter, and thought you might like to see how another currency trader approaches the markets. "I approach the markets as a game of probabilities. As far as I'm concerned, that's the only way to navigate the currency markets. "What I mean by a game of probabilities is this: I do as much as I can when figuring my fundamental and technical analysis. I read and study all I can...
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286 Hits
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Nov
11

The Lottery Mindset

The Lottery Mindset
Do you ever dream about winning the lottery? There are actually people who have such good luck that they repeatedly enter contests and win. They win so often that if they wanted, they could count on winning, even though they are essentially trying to capitalize on chance. They develop a "lottery mindset" in that they approach life by counting on rare chance events. The rest of us aren't so lucky, ...
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332 Hits
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Nov
04

Mechanical Trading Systems

Mechanical Trading Systems
From time to time, questions come up about magic indicators, and mechanical trading systems based on such indicators. People really believe in them, are thoroughly confused by them, or hate them because they cost so much money and very often return so little. Is there a right way to trade mechanically? I believe there is. There are two approaches. One is to mechanize yourself, literally become a h...
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387 Hits
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Oct
27

What is Containment?

What is Containment?
Containment is something akin to support and resistance. It is there but it isn't there. All of us have seen prices fall through so-called support like a hot knife passing through butter. We have all seen prices soar through resistance like a run-away balloon. Actually, support is a place at which a lot of people are willing to buy, therefore, buy orders tend to group at support. This temporarily ...
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Recent Comments
Dale Burreson
Nicely Said.
Friday, 29 October 2021 06:56
Martha Ross-Edmunds
Thank you, Dale. : )
Friday, 29 October 2021 23:01
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Oct
21

Middling the Market

Middling the Market
Do you ever wonder why there has to be a spread between what you can buy an option for and what you can sell it for? The simple answer is someone needs to make money and that someone is usually the market maker. Many option traders don't even think about the bid-ask spread. They don't even try "middling." Middling the market means you try to get close to the middle of the bid price and ask price. ...
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389 Hits
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Oct
13

Risk On, Risk Off

Risk On, Risk Off
There was a time when investors could diversify their risk by owning several different asset classes, like stocks, bonds and commodities. They could rest assured that if one asset class went down, other asset classes would go up to compensate. This strategy worked well for decades. But over the past few years, things have changed, and I think they've changed for good. So, who's to blame for this s...
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363 Hits
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Oct
07

What a Price Chart Really Represents

What a Price Chart Really Represents
Have you ever thought about what a price chart really represents? Is it just the movement of price that is seen there? For every price to actually post, there must be a buyer and a seller. Price charts are actually psychographs that measure traders' beliefs of present and future values. Traders are emotional and the market price is not always right – especially at extreme tops and bottoms, where e...
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387 Hits
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Sep
30

Reverse your Position

Reverse your Position
Did you know that there are professional day traders who reverse their positions about 60% of the time when they take losses? Why do they do this?? The market should not have technically reached the exit price, which is placed where the intraday market trend may have reversed the short-term trend. Consider a market that moves a three-day average range above the opening price, then breaks sharply t...
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368 Hits
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Sep
23

Trading in a Trading Range

Trading in a Trading Range
When prices are in a trading range, count the number of closes above or below a specific price near the vertical mid-level of the trading range. If 70% of the closes are above the mid-level price and the market cannot rally and close above reaction highs, a severe correction may be imminent. If a market breaks and cannot close below reaction lows, then expect a rally to carry prices above the reac...
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562 Hits
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Sep
16

Getting Credit

Getting Credit
Thanks for your prompt reply and explanation Joe. I was thinking to do straight call/put to pre-define my risk. Follow up question please. If I buy a call for 30 days and close out the option in 15 days, Do I get credit for 15 days that I did not use? The answer to your question is no! You do not get credit for the days you did not use. In fact, you penalize yourself. You paid for 30 days, not 15....
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409 Hits
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Sep
01

Procrastination

Procrastination
Many of us procrastinate over making decisions in our daily lives, whether the choices are trivial or highly important. When we postpone the decision-making process, we essentially move back our mental deadline. This bad habit often begins during childhood (I'll get to my homework or chores later), extends into career (there's a better opportunity out there, but I'm comfortable where I'm at), and ...
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552 Hits
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Aug
26

The Myth of Making the "Right" Decision

The Myth of Making the "Right" Decision
We all face big choices throughout the course of our lives. Whether the decision involves career, business, investing, or family, I find that many people place too much emphasis on that one specific choice as the be-all, end-all. In reality, following through on our decisions is the most important step in the equation. It's not so much about making the "right" choice, but instead about choosing th...
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543 Hits
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Aug
19

Trading and Truth

Trading and Truth
One of the clear, clean things about trading is that truth is immediately and finally manifested. The price goes up or down or nowhere. Your trade or position is profitable or not. You can't spin it any other way. You're right when you make money. You're wrong when you lose money. That's just the way it is. There are also other truths involved. You just got lucky. You have a robust and proven meth...
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506 Hits
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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.