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Trading Educators Blog

#1 Trading Blog Site
May
24

Maintaining Discipline

Winning traders are disciplined. Discipline means controlling impulses and fighting the urge to abandon your trading plan prematurely. Maintaining discipline is often easier said than done, especially when the market is moving in your favor. It's hard to avoid closing a trade out early in order to lock in profits. Some winning traders face more losers than winners, and when you hit upon a winner, ...

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  1713 Hits
May
19

Trading Opportunities

Good trading times may be just ahead. Are you ready? It's times like these when the right mental edge can make all the difference. If you want to take advantage of trading opportunities for the New Year, it's vital that you approach trading with the proper mindset. Be ready to work hard and do whatever it takes to come out a winner. Unfortunately, many traders aren't up to the challenge. They don'...

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  1659 Hits
May
09

Why Stops

​Would you ever think of jumping out of an airplane without a parachute? Of course not, but that's what some people do when they trade the markets. They are very willing to put their money on the line, but they don't have much to protect them from a major disaster. Placing a stop, for example, can prevent you from allowing a small loss to turn into a big one, but many traders avoid placing stops. ...

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  1899 Hits
May
04

If You Doubt, You May Be Out

​It's almost impossible to have rock solid confidence as a trader. Sure, some traders can't be thrown off track very easily, but it's natural to feel a little afraid occasionally. Let's look at some of the reasons that you might feel shaken. What the markets will do tomorrow or next week is far from certain, and you don't have a crystal ball. Your information is fallible. And without perfect infor...

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  1775 Hits
Apr
22

Ready to Lose

Imagine what you would do in the following scenario. You have been looking at a position for a week. You had a clear and simple trading plan: Just wait for an announcement at the end of the week, watch prices jump, and then sell. As might be expected, things aren't working as you had planned. First, no clear trend has emerged; prices are moving chaotically up and down. Second, it's been two days s...

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  1782 Hits
Apr
20

Being Flexible

How flexible are you in your everyday life? When you are in a new city, do you worry about getting lost or do you just go your own way and assume that somehow and someway you'll eventually get back to your hotel? Do you get upset when you are told you are wrong, or do you welcome criticism or an opposing opinion? The ability to be open and flexible often makes the difference between winning and lo...

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  1345 Hits
Mar
23

Handling Success

In his book, "Trading to Win," Dr. Ari Kiev notes, "winning days are often followed by plateaus and losing streaks." Behavioral economist Dr. Terrance Odean observed that novice online investors who had a series of winning trades tended to have periods of overtrading. It's as if they believed they could take more risks, and potentially lose profits, since they had just made more than they expected...

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  1879 Hits
Mar
15

Take Advantage of New Market Opportunities

Something is usually going up when something else is going down. Therefore, good trading times may be just ahead. Are you ready? It's times like these when the right mental edge can make all the difference. If you want to take advantage of trading opportunities for the New Year, it's vital that you approach trading with the proper mindset. Be ready to work hard and do whatever it takes to come out...

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  1626 Hits
Mar
01

Staying with Winners

When you are riding a winner, avoid looking at it all the time.Search out new trades in other markets.Absorb yourself with looking for opportunities elsewhere, if you are the type that must have market action.Diversification is the key word here.But remember, you can afford to take only the very, very best trades elsewhere when you are riding a winner.Don't blow away the profits you are making on ...

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  1703 Hits
Feb
22

Finding a Balance

​Are you having trouble finding a balance between your trading and the rest of your life? Since you took up trading, do you seem to be possessed by it? Trading can be all-consuming. You don't seem to have time for your family, or any recreational activities. Is it always going to be that way? Have you gotten into something in which you are now trapped? What I'm describing is what happens to many p...

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  1740 Hits
Feb
17

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, y...

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  1944 Hits
Feb
07

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 behavio...

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  1826 Hits
Feb
01

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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  1867 Hits
Jan
25

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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  1687 Hits
Jan
17

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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  1825 Hits
Jan
12

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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  1898 Hits
Jan
05

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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  1688 Hits
Dec
22

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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  2122 Hits
Dec
01

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 t...

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  1705 Hits
Oct
13

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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  2346 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.