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Your Worst Enemy

Your Worst Enemy
  In general, we are our own worst enemy when it comes to trading. If you're not careful, you will be your own worst enemy. There are many ways to sabotage yourself as a trader.   Not creating a trading plan, or creating one and then not following it are two of the most common.   Some ways to self-defeat are deep seated; they lurk at the back of your mind and work behind the scenes....
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When it comes to trading it seems that the more you know, the less you know, and the more you become confused.

When it comes to trading it seems that the more you know, the less you know, and the more you become confused.
  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 of information do not necessarily lead to greater knowledge. There are three reasons for this. First, s...
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Unlike many games and sports, trading has an additional factor: the market!

Unlike many games and sports, trading has an additional factor: the market!
Imagine playing tennis if the ball had a mind of its own, if it could run off to the sidelines and bounce up and down for a minute or two. Imagine a game of golf in which the ball could occasionally go off down the fairway, dance about, and do whatever it wanted. Imagine a chess game in which the pieces suddenly became worthless, or a hockey game in which the puck suddenly went against everything ...
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Trading Discipline

Trading Discipline
  Trading discipline exists in two distinct parts: ·          Before your order is filled. ·          After your order is filled. Let’s look at each of these categories, because both are tremendously important. Trading Discipline Before Your Order Is Filled: Here we are talking about all the things you do as a tra...
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Maintaining Discipline: When Past Choices Influence Future Decisions

Maintaining Discipline: When Past Choices Influence Future Decisions
Traders and investors have difficulty "letting their profits run." When you see your investment increase in value, it's hard to avoid selling early to lock in profits. But not every trade goes your way, so when you come upon a trade that does produce a profit, it's vital for your long-term success to optimize the profits for that particular trade. You must make more profits on your winning trades ...
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Spread Trading Idea 03/31: ZSX17 - 2*ZCN17

Spread Trading Idea 03/31: ZSX17 - 2*ZCN17
Today I am looking at a so called ratio spread: Long 1 November Soybean and short 2 July Corn. The spread looks interesting to me because it is trading at a level where it could turn around again and follow its seasonal pattern to the up-side. The current level (approx. 235) has provided support several times. The seasonal statistic looks promising as well, with 17 winning trades in a row. But thi...
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Anticipation regarding Losses

Anticipation regarding Losses
Trading is a business where you expect to see more losing trades than winners. Expecting to win is apt to produce more disappointment than joy. That doesn’t mean you won’t have a high percentage of winning trades, but it is safer to anticipate otherwise. To the beginning trader, especially, this fact of life can be stress producing and somewhat disappointing. How you cope with losses is all a matt...
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Trading for a living

Trading for a living
Trading for a living involves more than getting in and out of the market at the right time, and more than thinking about moving averages and indicators. Trading is a business, not just a job, and every business in the world has to be managed. Every business involves the managerial functions of organizing, planning, delegating, directing, and controlling. If you, the trader, are to perform these fu...
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How to Approach Trading - Part 7

How to Approach Trading - Part 7
Conclusion It is critical to develop a well thought out and organized trading plan. It is then important to have the discipline needed to follow it. Diversify your trading into several unrelated markets, or focus on one market and time frame where you have seen you can make money. Trading, by its nature is not investing. Trading requires consistent monitoring on at least a daily basis because of t...
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How to Approach Trading - Part 6

How to Approach Trading - Part 6
Manage the Trade 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....
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Keeping Your Focus Right

Keeping Your Focus Right
Some time ago I spent 4 days in a Forex trading office, teaching and working with the traders there. It was interesting to see how these traders speak with one another, and to listen to what they say. I couldn’t help making some observations which I will now share with you. If you are a part- or full-time trader, you may have enjoyed the attention this wild and wooly occupation brings at social ga...
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How to approach trading - Part 5

How to approach trading - Part 5
Follow the Markets After you've determined your strategy and the market or markets you will trade, you can start following the price action. It is important to follow each market consistently and see the trading opportunities as they develop. Jumping around from one market to another often leads to missed or late execution of your method. I think it's important to let the market tell you what to d...
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Can Trading be trained?

Can Trading be trained?
  Please listen to the following podcast when you have a few minutes: https://soundcloud.com/bloomberg-business/the-incredible-true-story-of-the-real-life-trading-places I found the podcast interesting because of a few facts I want to discuss in today’s blog post. First of all, I am also a believer that trading can be trained but not necessarily everyone can trade. Trading requires a certain ...
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When Low Probability Setups Seem Attractive

When Low Probability Setups Seem Attractive
“I’ll worry about it later?” When trying to deal with the fact that we must eventually cope with an unpleasant event, such statements help us get through life. We often put off things we don’t want to do, hoping that we will gather enough energy and enthusiasm to deal with them in the future. Take your taxes for instance. Do you wait until the last day to pay them? Why not start working on your ta...
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How to Approach Trading - Part 4

How to Approach Trading - Part 4
Diversify:  Next, you'll need to choose which markets to follow. 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 mark...
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Self-forgiveness and resolution

Self-forgiveness and resolution
  If your financial losses have injured or hurt your personal relationships, you must apologize and ask those persons for their forgiveness. Most people will forgive you immediately but whether or not they forgive you is unimportant. It is most important that you forgive yourself and resolve not to repeat the same mistakes. It’s also important to realize that if the offended person does not f...
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How to Approach Trading - Part 3

How to Approach Trading - Part 3
How to Get Started:  I've seen many different trading plans. Whether they're two paragraphs or ten pages long, they put forth a way of looking at the market and they attempt to create some framework for approaching the markets. A good plan will include a well-tested strategy, a trading method, or a setup. Having a positive expectation should allow you to have the confidence to start trading y...
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Emotions in Context

Emotions in Context
When you put your money on the line, it's hard to avoid getting a little emotional. Beginning traders may be especially prone to experience a roller-coaster ride of emotions, feeling euphoric after a winning streak, yet disappointed after a string of losses. How well do you handle emotions? Winning traders control their emotions. They don't let their emotions control them. But emotions don't happe...
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How to Approach Trading - Part 2

How to Approach Trading - Part 2
Discipline is the Key:  You will need discipline in several areas to be successful. First you'll need the discipline to make a plan, rather than shoot from hip. Without discipline, many approach the markets like a craps table and they can expect the same results; short-term successes based on luck and long-term losses based on randomness. Second you'll need the discipline to follow the plan. ...
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About Change

About Change
People don't want to be changed. They don't want to be told that they need to change. Do you ever find yourself struggling in those areas? Thank you for your honesty. If there is a struggle, that means there is a battle for truth. If you're not battling, you've already lost. Truth has been lost and deceit has won. We must come to a place where we are willing to unclothe our soul, ultimately, compl...
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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.