Trading Educators Blog

A thorough understanding of who you are and what makes you tick is essential in trading. How and what you think, what you believe, and how you behave are critical parts of winning in trading as well as winning in life. It seems very few traders understand, or are aware of this subtlety in the trading profession. You can get by without knowing who and what you are in most other careers but in tradi...

​Learning the business of trading is basically no different from learning any other business. The important thing is that you realize that trading is a business that must be studied and learned correctly, because that determines your success or failure. Winning means learning major guidelines and concepts that you repeat so often in your own behavior that they become good habits. These good habits...

 Here is what I found on Wikipedia about Ed Seykota: Edward Arthur Seykota (born August 7, 1946) is a commodities trader, who earned S.B. degrees in Electrical Engineering from MIT and Management from the MIT Sloan School of Management, both in 1969. In 1970, he pioneered Systems trading by using early punched card computers to test ideas on trading the markets. Seykota resided in Incline Vil...

I like Marty Schwartz and his trading book "Pit Bull" a lot. It is an honest book about a trader who had his ups and downs in the market as we all do. In his book he writes, he made his highest progress, when he stopped trying "to be right" with the trades and instead followed the approach of "making money". Here is what I found on Wikipedia about him: Martin S. Schwartz (Buzzy, born March 23, 194...

​During the next few weeks, I want to have a look into the "golden rules" of famous traders with the idea, to find something they all have in common. I am starting with Paul Tudor Jones. Here, what I found in Wikipedia about him: Paul Tudor Jones II (born September 28, 1954) is an American investor, hedge fund manager, and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corpor...

To become a truly successful trader you must become a truly committed trader. How do you get yourself to be in control? Statistics and society may predict, but you alone determine whether you will succeed or fail. You alone are in control. You alone must take responsibility for your performance and your life. There are always tremendous opportunities in the markets. It is not what happens; it is w...

​In this instance, you spread by taking an opposite position in a related contract. You might spread corn against wheat. You might spread heating oil against unleaded gasoline. Quite often, operators who trade large size and are market makers hedge the S&P 500 by taking an opposite position in the Nasdaq or the Dow. Soybean traders often hedge by spreading off against the meal, the oil, or bot...

As a trader, it's very important that you keep accurate records of all factors that may impact the outcome of your trades so that you can learn from your losses, improve your performance, and do better next time. From a psychological viewpoint, by documenting actions, thoughts and emotions associated with both wins and losses, you will come to see what works and what doesn't. When it comes to loss...

​Our past experience is a factor coloring the way we see things. We get an electric shock, and we decide never again to put a hairpin into an electrical outlet. Or, when we kiss our mate and receive a kiss back, we learn that kissing that person produces pleasure, so we enjoy doing it again! Likewise, our experience with the markets, colors our perception, and can influence the way we approach the...

​Early in the trading day, as part of your daily preparation (you do have a daily preparation, don't you?) it's helpful to practice a little to get a "feel" for what you might do and how you might trade. One way to do it is to make a few small trades, using just a small percent of your normal trading size. Putting on a small position usually helps you focus. Once you've entered the market, see how...

​Because we don't know what "successful" means to every individual, we should divide traders into different groups. I think most traders can be found in one of the following groups: Group One - these are mainly traders new in the trading business. They have read a book or two and they find trading very interesting, but they still don't know where to start. Group Two - these are the traders who alr...

​I'll try to give you a few things to think about, but unless you can overcome your inability to accept risk, you don't have much of a chance to make it as a trader. Trading and risk are virtually one and the same. Shorter term trading isn't about using a buy-and-hold strategy, and minimizing risk by holding on for the long-term. Short-term traders capitalize on volatility and the fact that volati...

Professional day traders 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 to the downside and posts new intra...

There are several major mistakes that traders, especially beginning traders, are making much of the time. Here is a (for sure not complete) list. Mistake #1: Because of hype they hear from many sources, beginning traders believe they can learn trading in a couple of days or weeks. The truth is, becoming successful in the trading business takes much longer and is harder to achieve than it seems in ...

​Taking an honest evaluation of your own strengths and weaknesses is crucial to becoming a consistently profitable trader. If you can't identify those habits which continually make (or cost) you money, then you're just shooting in the dark. It's extremely important that you know things about yourself such as: The time of day you are most profitable. The position size that works best for you. Your ...

​Winners take credit for their successes and full responsibility for their losses. Losers blame others for their losses and take full credit for their successes. A "shoulda-coulda-woulda" mentality does more than characterize the losing trader, it prevents him from making positive behavioral changes. Acceptance of total personal responsibility is not an optional choice for a winner it is a mandato...

What is a mental stop? Why are traders afraid of them? Are they worthwhile? Why would anyone want to use a mental stop? Let's begin with why anyone would want to use a mental stop! It is usually preceded by your having been stopped out of the market only to have the market reverse and go the other way, causing you to miss a possibly profitable trade. That being said we can now address the question...

Experience and trading from a plan can help you to make trades in a carefree, relaxed, and focused manner. It is important that you avoid putting unnecessary pressure on yourself. Success or failure is not riding on a single trade. You make it as a trader in the day-to-day trading, learning to be satisfied with what the market hands you. Avoid thinking you have to be right. You cannot impose your ...

Distraction is not something you can afford. If you cannot be fully focused on the price action and on following your trading plan, you are going to frequently find yourself in the situation you describe. The best rule a trader can follow is to focus on the action, not the outcome. Yes, I know that you, like many others are attracted to trading for the rewarding profits that can be made. You feel ...

​Trading is a profession where dare not give up in the face of adversity. You must go into the trading day expecting to have losses. It's not the most optimistic outlook, right? Trading in today's markets isn't like trading in the steadily upward trending markets in the days before the advent of a PC that could let you see charts. In the days when markets trended as opposed to swinging, just about...