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Trading Educators Blog

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Sep
19

Your Role in the Market

Your Role in the Market
​ Our past experience is a factor coloring the way we see things. We get an electric shock, and we decide never again to put a hairpin into an electrical outlet. Or, when we kiss our mate and receive a kiss back, we learn that kissing that person produces pleasure, so we enjoy doing it again! Likewise, our experience with the markets, colors our perception, and can influence the way we approach th...
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91 Hits
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Sep
19

Graceful Trading

Graceful Trading
​ Whether you're a novice or seasoned trader, there are days when you face setback after setback: Adverse events go against you. You make a trading error. You misread the markets. The possible setbacks can be endless, and it hurts a little to watch your account balance take a hit when one of them catches you off guard. But whatever roadblocks get in your way, you have to take them in stride. How c...
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157 Hits
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Sep
12

Setbacks

Setbacks
​ Are you experiencing an emotional roller coaster, euphorically celebrating wins, but facing despair when losses mount? If you are, you may be taking things a little too personally. If you want to trade like a winner, you need to take responsibility for your actions, taking every precaution possible to neutralize adverse events and to control risk. That said, when things go wrong, it may not alwa...
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187 Hits
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Sep
05

Getting in Step with the Market

Getting in Step with the Market
​ Early in the trading day, as part of your daily preparation (you do have a daily preparation, don't you?) it's helpful to practice a little to get a "feel" for what you might do and how you might trade. One way to do it is to make a few small trades, using just a small percent of your normal trading size. Putting on a small position usually helps you focus. Once you've entered the market, see ho...
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189 Hits
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Sep
05

Be Flexible

Be Flexible
​ As traders in the markets, it's informative to study everyday examples of mass psychology. Although humans are highly intelligent, they can act like cattle blindly following the leader of the pack to the slaughterhouse. For example, have you ever observed how people drive in busy rush hour traffic? On a crowded freeway, it's common to see people refuse to acknowledge that the flow of traffic has...
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229 Hits
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Aug
29

Emotions

Emotions
​ Winning traders are extremely disciplined. They wisely study the markets, devise a trading plan, and follow it. They control their impulse to abandon their plans prematurely, and they don't allow emotions, such as fear and greed, to influence their trading decisions. In the trading profession, emotions often get a bad rap, however. There are critical moments of investing when it's vital to contr...
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Recent Comments
Denise Ross
Gary - Joe asked me to post a reply as he is unable to at this time: "Hi Gary, It’s been a while since we heard from you. It’s r... Read More
Sunday, 01 September 2019 18:47
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Aug
22

Successful Trading

Successful Trading
​ Because we don't know what "successful" means to every individual, we should divide traders into different groups. I think most traders can be found in one of the following groups: Group One - these are mainly traders new in the trading business. They have read a book or two and they find trading very interesting, but they still don't know where to start. Group Two - these are the traders who al...
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Recent Comments
Andy Jordan
Yes, because you can not count them together. 25% are trading break-even or better. The 10% and 2% fall also under the 25% (or bet... Read More
Friday, 23 August 2019 10:19
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Aug
22

Regrets

Regrets
​ Fear and greed drive market action. We enthusiastically put on trades when we think a huge profit is assured, but when we see the market shift dramatically, we get out as quickly as possible. We fear being trampled by the masses as they all rush to sell. Fear and greed are powerful emotions that underlie the actions of the masses, but behavioral economists argue that regret is equally powerful. ...
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334 Hits
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Aug
15

Stress Errors

Stress Errors
Have you ever been so excited about a trade that you couldn't sleep at night? Or perhaps you are trying to dig yourself out of a hole and worry has taken a toll. Studies of disasters, ranging from major environmental catastrophes to minor laboratory accidents, happen when people are under extreme stress or experience physical exhaustion. When people are tired, there's an increased risk of disaster...
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279 Hits
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Aug
08

I just can’t seem to accept uncertainty and risk. What can I do?

I just can’t seem to accept uncertainty and risk. What can I do?
​ I'll try to give you a few things to think about, but unless you can overcome your inability to accept risk, you don't have much of a chance to make it as a trader. Trading and risk are virtually one and the same. Shorter term trading isn't about using a buy-and-hold strategy, and minimizing risk by holding on for the long-term. Short-term traders capitalize on volatility and the fact that volat...
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360 Hits
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Aug
04

Creative Idea

Creative Idea
​ The winning trader stays ahead of the crowd. In ever-changing market conditions, you have to think of new, innovative trading ideas. But it isn't always easy. There are times when you feel mentally stuck and unable to think creatively. When you are feeling a little stuck, there are specific steps you can take to get your creative juices flowing. Creativity can't be forced. If you try to force yo...
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380 Hits
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Aug
01

Should I reverse when I am having a loss?

Should I reverse when I am having a loss?
Professional day traders reverse their positions about 60% of the time when they take losses? Why do they do this? The market should not have technically reached the exit price, which is placed where the intraday market trend may have reversed the short term trend. Consider a market that moves a three-day average range above the opening price then breaks sharply to the downside and posts new intra...
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343 Hits
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Aug
01

Three Traders

Three Traders
​ The expectations you hold about where your trading career is going can have a powerful impact on what you do and how you do it. Consider three traders, Jake, Steve, and Paul. Each has a different outlook, and this outlook dictates how they approach the markets. Jake is a pessimist. He wants to become a profitable trader, but his attitude gets in the way. He thinks, "I just don't have the talent ...
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416 Hits
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Jul
25

Beginning traders main mistakes

Beginning traders main mistakes
​ There are several major mistakes that traders, especially beginning traders, are making much of the time. Here is a (for sure not complete) list. Mistake #1: Because of hype they hear from many sources, beginning traders believe they can learn trading in a couple of days or weeks. The truth is, becoming successful in the trading business takes much longer and is harder to achieve than it seems i...
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328 Hits
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Jul
25

Concentration

Concentration
​ Your ability to concentrate fully and intensely can mean the difference between consistently taking home huge profits and barely staying above water. It's really important that you pay attention to multiple sources of information, sift through them, prioritize each separate piece, and make a wise decision once all information has been scrutinized. You can't be distracted and unfocused while form...
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393 Hits
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Jul
18

Stereotypes

Stereotypes
​ Marvin has been following a company stock for the past year. It's a great company with solid management, high sales growth, and consistently high earnings. It is in a booming industry sector and a favorite of the media. After a year's worth of careful deliberation, Marvin has decided to pull the trigger and buy a large position. He can't see what can go wrong. What can go wrong? It's a good comp...
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485 Hits
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Jul
12

Controlling Emotions

Controlling Emotions
​ Winning traders cannot afford to be influenced by their emotions. The nature of trading demands an objective, logical approach. If you experience extreme excitement after a win and extreme disappointment after a loss, you will be living on an emotional roller coaster: up and down, up and down. Many beginning traders have head knowledge of what it means to control their emotions. They can imagine...
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356 Hits
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Jul
12

Your Own Way

Your Own Way
​ Don't follow the crowd! You've been warned over and over, but few are that independent minded. Breaking away is harder than it looks. We are all familiar with the rebel, the person who breaks all the rules and is skeptical of the status quo. At the other extreme, the ultra-conformist seems to follow the rules too blindly. Neither extreme is optimal for trading. It's necessary to find the right b...
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449 Hits
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Jul
04

Evaluation of your Trading

Evaluation of your Trading
​ Taking an honest evaluation of your own strengths and weaknesses is crucial to becoming a consistently profitable trader. If you can't identify those habits which continually make (or cost) you money, then you're just shooting in the dark. It's extremely important that you know things about yourself such as: The time of day you are most profitable. The position size that works best for you. Your...
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372 Hits
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Jul
04

Trading Slump

Trading Slump
​ Jake has just made three losing trades in a row? He decides he is in a slump and is now worried that he can't get out of it. But is he really in a slump? Perhaps he's just panicking for no good reason. He may just have a pessimistic attitude, but this might be enough to keep him stuck. Thoughts are powerful. The reality of the situation may not matter. All that matters in the end is your percept...
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459 Hits
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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.