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Trading Educators Blog

#1 Trading Blog Site
Aug
05

Dollar Value on "Success"

One of the great lies that all traders tell themselves, is that we need to make a lot of money in order to consider ourselves successful. That there's a dollar value on "success." That is absolutely false. The goal isn't to double your account or trade for a living. The goal is to be profitable. At Trading Educators, we hear from many successful traders — traders we ourselves helped in their train...

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  846 Hits
Jul
30

Indicators

Hey Joe! Which indicators work for real trading tactics? Have you ever noticed that my entries and exits are based on price levels—actual price bars? I use actual price data to determine most of my entries and exits. There is no better technical indicator than price itself. Think about it for a minute. You are making a mistake if you use indicators for entries and exits because every indicator is ...

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  870 Hits
Jul
23

Information Overload

Have you ever felt as if the more you know, the less you know, and the more you become confused? Why is this? People have the tendency to believe that the accuracy of their forecasts increases with more information. This is the illusion of knowledge - that more information increases your knowledge about something and improves your decisions. However, this is not always the case - increased levels ...

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  915 Hits
Jul
15

Day Trading or Swing Trading?

Hey Joe! Which is more profitable day trading or swing trading? Wow! What a loaded question. Many traders who are just starting out, want to know which type of trading they should focus on. Some traders prefer day trading while other traders prefer swing trading, and quite often traders like to mix it up a bit and trade both styles simultaneously. The most important thing to keep in mind before ma...

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  928 Hits
Jul
09

Getting Rid of Ego

Have you ever wondered how to get your ego out of your trading? Have you wanted to be market-centered, but find yourself consistently being self-centered? One thing I know for sure: your self-concept has to be separate from your trading. You began as an individual long before you ever thought of trading. And you exist as an individual beyond the time you spend trading. When personal self-worth get...

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  1030 Hits
Jul
02

ATR Indicator

How does the ATR indicator work? The ATR indicator stands for Average True Range, it was one of the handful of indicators that were developed by J. Welles Wilder, and featured in his 1978 book, New Concepts in Technical Trading Systems. Although the book was written and published before the computer age, surprisingly it has withstood the test of time and several indicators that were featured in th...

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  1343 Hits
Jun
24

The Close

Why is it with futures that we see the Close at one price, and then a half-hour later it has moved to another price? Why isn't the Close the same as "Last," and what is the "Consolidated Price?" "Last" is the last price at which an underlying stock or futures is traded. It could also be the "Close." The Close that you see within minutes or seconds after trading has ceased may not be the final pric...

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  1073 Hits
Jun
18

Can seasonal transitions help a commodity trader?

Yes! Seasonal transitions create workable Spread strategies. I'll let my Andy Jordan, an expert in seasonal fundamentals, answer. Andy! You have the floor: "Change gives birth to risk – but also creates opportunity. Seasonal transitions create workable spread strategies because markets have to struggle to maintain equilibrium between supply and demand as conditions undergo dynamic change through t...

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  780 Hits
Jun
11

5 Tips on How to Deal with Drawdowns

After the recent harsh correction in the stock markets and cryptocurrencies, many traders and especially investors currently find their accounts in a not so nice drawdown. So I thought this might be a good time to give some advice on how to deal with such drawdowns. What's a drawdown? Here's a quick explanation: You buy one stock of a company at $100 and after a month it's trading at $120. You're ...

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  1496 Hits
Jun
11

Break Out from a Trading Range

Here are two ways to know when prices are getting ready to break out from 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 mark...

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  1092 Hits
Jun
03

Trading Psychology

Many traders are aware that trading psychology is the most crucial piece of the puzzle in learning how to become a profitable trader. However, most traders avoid taking the steps that are necessary to correct or improve their response to market behavior and end up paying a hefty price in the end. There are some specific steps you can take to improve your reaction to market action and strengthen yo...

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  980 Hits
May
28

Reader Question

A reader asks: "Hey Joe! I'm pretty new at this. Can you tell me the rules for buy and sell stops?" When the market trades above a buy stop price order, it becomes a market order. The first down tick after the market order price is activated determines the highest price at which the buy stop order may be filled. The rule to remember placing stops is this, "Buy above and sell below." Buy stops are ...

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  902 Hits
May
21

Fear

A reader asks: How do you handle fear? I seem to have plenty of it. Let's get one thing straight. Fear, for the majority of traders, is a very real thing. You have it, I have it. Others have it as well. What is it that traders fear? The top three, in order, are: Fear of missing a trade. Fear of losing money. Fear of being wrong and losing face. In order to become a professional trader, you must le...

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  1051 Hits
May
14

I was asked the following question:

"Do you think that what this guy wrote below is true? 'You can get ahead of yourself in this game, and it's dangerous to get cocky. But I've had times where for an hour I could do no wrong. I'm trading and 99 percent of the trades are good, they're all for 30 or 50 contracts, and I'll make 10 grand. Then I'll overextend myself and maybe buy 10 or 15 contracts, fighting the trend just because I kno...

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  1039 Hits
May
07

Support and Resistance

One short time ago I received a couple of emails questioning whether or not I believe in support and resistance. In fact, one subscriber said if I didn't believe in support and resistance, then I couldn't possibly believe in trend! Why? Because in all cases the situation ends. Here's what I believe: The trend is your friend until the end. The swing is the thing until it goes "ding." What is suppor...

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  1008 Hits
Apr
30

Money Supply

How does money supply affect trading in the markets? There are two important components of federal market activity which affect long- term economic activity and stock and commodity values; these are interest rates and money supply. A contracting money supply was one of the factors that caused the Great Depression of the 1930's. In the early 1980's most traders focused almost totally on the money s...

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  995 Hits
Apr
23

Some people seem to like to lose, so they win by losing money

This is one of the quotes about trading that stuck with me. I googled it and it's from Ed Seykota, I probably read it in one of the Market Wizards books, which I can highly recommend. The exact quote is "Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money." Now this applies especially well to the retail world of traders. And i...

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  1090 Hits
Apr
23

Closing Out a Trade

You must be disciplined in following the plan of your trade. 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 entered the t...

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  983 Hits
Apr
16

What will success as a trader bring to my life?

Success has many faces: peace of mind, high levels of health and energy, loving relationships, financial security, meaningful goals and aspirations, and the feeling that you are growing into all that you are capable of becoming. Becoming all that you can be is called "self-actualization."It is important to recognize that success is not only financial, but exists on many levels. A person may find s...

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  1072 Hits
Apr
09

Avoid negative open equity

​There is an old saying that when day trading positions have had negative open equity most of the day, and an opportunity arises to exit the market at break even with less than 30 minutes of trading rises, go ahead and exit the market.  Unless the market is moving rapidly in your direction with expanding-in-length bars, and no more than 5 minutes left, exit immediately and consider the opport...

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  1015 Hits

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.