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Safe Trading

Safe Trading
​ Humans don't like taking chances with their money. If given the choice, they would take a sure thing rather than a gamble, even if it meant making relatively little profit. What do you think most people would do, take $100 right now or take a gamble in which they would either receive nothing or $200? Most people would take the $100 but would you? If you trade the markets as a short-term trader, ...
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Stress or just Excitement?

Stress or just Excitement?
There is a tendency to become overemotional when trading. Overcoming the propensity to play emotionally requires a conscious commitment to specific trading objectives. This entails choosing a target, developing a strategy, and finding a method for adhering to it. A goal enables you to keep a relatively even keel through good and bad periods, to sustain momentum, and to keep from becoming bored. Of...
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Why do some traders make money with seemingly effortless confidence while others sweat bullets every time they act?

Why do some traders make money with seemingly effortless confidence while others sweat bullets every time they act?
We sometimes delude ourselves into thinking that the most successful traders somehow were somehow born different from the rest of us. We imagine they were born to win no matter what they did. But if that were true, you would also have to believe that those who succeed tend to do so because of their genes, social background, or luck, and not because they pursued success with more diligence, patienc...
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Contagious Behavior

Contagious Behavior
​ People have a natural affinity to follow others. It can be very adaptive at times. If you see someone slip on an icy sidewalk, for example, it would be wise of you to start walking slowly and carefully to protect yourself from getting hurt. People are so attuned to others that they mimic their behaviors without knowing it. Psychologists call this phenomenon contagious behavior. Contagious behavi...
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Seeing what you want to See

Seeing what you want to See
Some people live in a world of delusion and fantasy. They see what they want to see and ignore what they don't want to see. Traders are especially prone to this ailment. When your money is on the line, you are consumed with avoiding loss. Trading is a competitive business where few make it in the long term. This fact always lurks in the back of your mind, putting added pressure on you. In the back...
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What should I do after closing out a trade?

What should I do after closing out a trade?
You must be disciplined in following the plan of your trade religiously. 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 e...
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Stress and Vulnerability

Stress and Vulnerability
Many traders underestimate the influence of stress. Stress is not only a psychological reaction, but a biological response as well. When you are stressed, your body reacts instinctively. You are agitated, on edge, and ready to lash out. Your attention is restricted. Your mind is closed and inflexible. The stress response has a specific biological, adaptive function: Your energy is channeled into m...
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Mastering Yourself

Mastering Yourself
If we had a crystal ball, trading would just be a matter of buying at a bottom, holding the stock as the price continued to rise, and selling near a top, right before the public sells in a state of panic. But we don't have a crystal ball, and there is no foolproof way to forecast the markets. Sure, if you have enough capital, are willing to wait long enough for a stock price to increase, and will ...
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Keeping a trading journal

Keeping a trading journal
I keep one of sorts, it is part of my monthly homework. The journal is very basic and includes what trades I made during the day and my reasons for getting into the trade. My journal has changed a bit over time since my reasons for entering a trade now are pretty consistent. I think there are three reasons for keeping a journal. One reason is to have a manual backup in case there's a system or sof...
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Are You Sabotaging Yourself?

Are You Sabotaging Yourself?
People come from humble beginnings to achieve wealth, status, or fame. But to get ahead, successful people often had to break conventional rules. This readiness to break the rules is often associated with an affinity toward risk. Although they may achieve success, they may also have a shaky self-image. Sure they achieved a lot, but a voice deep inside their psyche still questions their self-worth ...
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The "Now Trap"

The "Now Trap"
There is a great attraction in all aspects of the modern age to immediacy. Likewise, most of the trouble in trading occurs through this love affair with the "now," with impatience, and with trying to hurry up the trading game. Traders want to make money in the markets now, today, and not tomorrow or next week. We love the Now. We are devoted to it and give it much weight. This problem may be espec...
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It’s not the Money, It's the Challenge

It’s not the Money, It's the Challenge
Why do you trade? Most people would think it's obvious. It's for the money, right? What many winning traders know, however, is that money is a poor motivator in the end. It's much more satisfying to pursue trading for the pure joy of mastering the markets, regardless of how much money you make. Winning traders are motivated more by the process of trading than by the profits they are making. It's c...
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It Can Look Good in Hindsight

It Can Look Good in Hindsight
The human mind is capable of extreme optimism. We have a strong need to win. This need can be so strong that everything looks rosy. For example, you may look backward at old charts and think, "It's easy to see winning patterns." Behavioral economists call this optimism, 'hindsight bias.' When we know how a stock price moved in the past, we think it all seemed inevitable when we look backward. For ...
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I just wiped out for the second time. Am I some kind of trading freak?

I just wiped out for the second time.  Am I some kind of trading freak?
Most successful traders failed at some point in their careers and wiped out their account. Many traders lose because they do not understand the nature of the decision-making process, which should be based on rational price action analysis versus emotional, irrational reactions to price action. A reason should be required for each market action taken. When fear exits a trade, it is more difficult t...
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Is Seasonality the same in all Markets?

Is Seasonality the same in all Markets?
You can find seasonality in all markets but I personally think there is a big difference in "reliability" or "strength" of seasonality in the markets. I personally think seasonality is strongest in the commodity markets. In all markets where you have a physical product and a production cycle during the year. Because the production cycle is always the same you get typical seasonal behaviors in thes...
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Trading is a Business

Trading is a Business
​ Is learning the trading business like learning any other business? The importance of how you learn the business of trading cannot be minimized because of the factors that determine your success or failure. Learning the business of trading is basically no different from learning any other business. Winning means learning major guidelines and concepts that you repeat so often in your own behavior ...
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Is learning the trading business like learning any other business?

Is learning the trading business like learning any other business?
The importance of how you learn the business of trading cannot be minimized because of the factors that determine your success or failure. Learning the business of trading is basically no different from learning any other business. Winning means learning major guidelines and concepts that you repeat so often in your own behavior that they become good habits. These good habits then become automatic...
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Being in a positive state of mind

Being in a positive state of mind
Being in a good mood won't necessarily make you a winner, but being in a bad mood will almost assuredly make you a loser. Starting since time began, the number of people who have won large sums of money through trading while feeling depressed, irritable, or angry could probably be counted on the fingers of one hand! In short, try to trade when you are in a good mood. Restrict yourself to times whe...
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Who's next in line?

Who's next in line?
"Buy low, sell high" is one of the most popular memes in the investment and trading world. And obviously, it does make sense, who wouldn't like to buy low and sell high all the time? I found this to be quite a helpful advice to invest in stocks for example. Wait for a crash, buy it and sell again when prices are back to old highs. Of course, the problem often is to figure out what's actually a low...
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Patience as a Central Pillar of Your Strategy

Patience as a Central Pillar of Your Strategy
Think of patience as a primary part of your trading strategy. Don't assign it a secondary or lesser role, elevate it on the list of what you consider important. And don't be put off by it when it doesn't seem to be working — it's working. Don't start feeling self-righteous about not trading, as if now it owes you (because you have been so disciplined and patient). This is a trap. Don't start to fe...
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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.