Trading Educators Blog
Eternal optimists often make the best traders. The winning trader engages in a constant search for innovative ways to take profits out of the markets. It takes a positive attitude to persist in the face of almost endless setbacks. If you are an optimist, you will pick yourself up gracefully after a loss. When you can't seem to find a high probability setup, you'll keep searching until you find on...
Do you ever wonder if you secretly want to fail? It's hard to believe, but some people do want to fail. They may not want to do better than their parents, and secretly, they set themselves up for failure. Others fear success. They associate success with added responsibility, and they want to avoid responsibility at all costs. But if you're like most people, you want to succeed. For whatever reaso...
Once you get into a trade, you must eventually get out. Some argue that this is more important than where you get into a trade. My experience has been that any fool can get into the market, but it takes a successful trader to consistently get out with a win. As I follow the markets, I find there are four reasons to get out of a trade. Prices move significantly against my position. Prices stop mov...
How well have you been doing in the markets these days? There have been many opportunities in the past few weeks, but an abundance of market opportunities, don't always guarantee success. Setbacks can be the rule rather than the exception when it comes to trading. Discovering reliable trading strategies is a challenge, and frequently, a promising strategy produces a series of losses, especially u...
Diversification is one of the crucial factors in the success of some, but not all trading plans, and may in fact make the difference between success and failure of the plan. Putting all your eggs in one basket is not a good idea for some traders. This approach takes the position that rather than trading ten contracts in one market, look to trade smaller amounts in several different markets. The ai...
It has often been said that trading is not rocket science. I believe that. You don't need to be as brilliant as a rocket scientist to trade the markets profitably. I know I'm not that bright. That said, there are moments when a trader has a brilliant insight and takes home huge profits because of it. (I don't know any rocket scientists, but I'll bet that a rocket scientist isn't brilliant every wa...
You will never be a perfect trader. However, 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...
Have you ever made a dumb mistake? Perhaps you knew you should have used a protective stop before leaving for two days to take your children on a road trip. You may have thought, "I'll stop off at an Internet café and monitor the trade." But it didn't happen. You got wrapped up taking care of your children or worrying about traffic, and you didn't get around to looking at the market. It fell hard...
Many traders are smart enough to know that they will win in the long run by taking only the best trades, but become impatient due to the lack of anything happening. They forget that the long run can be "long". Taking only the best trades can be frustrating. They come along rarely, and even when they do there is no guarantee of winning with them. Long gaps occur in between. We can become angry and ...
Although I haven't the faintest idea of how to play chess, it certainly seems like a great idea. I imagine you can improve stock and futures trading by learning how to play chess. It might also help to develop an interest in physics. Every trader should learn to develop his problem-solving and pattern recognition abilities. I've been told that nothing does this better than learning how to play ch...
By being flexible I mean that over time, your trading philosophy will undergo changes. These changes are brought about because of external events (economic considerations, natural disasters, political events, etc.), and because of internal events, usually my own mistakes. My views change as economic, political, and technological changes occur both on and now off our planet. My views change as I se...
Throughout the day you make everyday decisions that mean little to you. You drive your kids to school and along the way, you make a host of decisions about which route to take, where to turn, or when to stop off for gas. Each decision is made with little thought. Later in the day, you may decide to stop off at the supermarket. You decide what to buy for dinner and how much you will spend. Do you o...
After reading the financial page on Wednesday night, Jim thought, "How could anyone invest in the markets and get a sound night's sleep?" After you saw the major indexes drop on Wednesday, you might have thought the same thing. But as a seasoned investor or trader, you realize that such corrections are commonplace and you've learned to take them in stride. You don't worry about it and know that i...
