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Trading Educators Blog

#1 Trading Blog Site

Practical Teaching Derived from over 60 Years of Trading Experience and over 30 Years of Mentoring .  Click here to learn about private mentoring with Master Trader Joe Ross.

Nov
17

All-In Perspective

As a beginning trader, Chuck had just put on his tenth trade. He was still new to trading, but he was optimistic that he would be successful. He wanted to succeed. He thought, "I want to prove that I'm a good trader. I hope I do well on this trade. The outcome is critical to the rest of my trading career." Chuck's thoughts and feelings are understandable. Whenever we start a major endeavor - start...

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  160 Hits
Nov
09

Accepting the Chaos

A bird flaps its wings. A storm strikes miles away. According to Chaos Theory, a seemingly irrelevant action can precipitate, and contribute to, a major event. The right set of factors comes together, and a major event takes place. It's easy to imagine an unlikely chain of events that may initiate a market move. A housewife attends to her crying child who has tripped over the newspaper, and in doi...

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  182 Hits
Nov
03

Pressure

Sometimes I get some really strange questions in the mail. The one that follows is one of them. Although I try to be like "Rambo" when I trade, I haven't in actuality fully achieved "Rambo's" degree of "coolness." "Is it really true that you are able to stay calm and relaxed when you trade? Are you saying you have never cracked under pressure?" There have been times when I made mistakes under pres...

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  220 Hits
Oct
27

Get Back on Track

This is good advice outside of Trading as well. "Have you ever had a bad day and wanted to stand aside until the feeling passed? Sometimes it is a good idea. It may be necessary to take a break, relax, contemplate, and refocus on the task at hand. The winning trader trades freely and effortlessly and it is vital to trade with such a mindset. Traders are similar to star athletes who perform at thei...

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  160 Hits
Oct
20

Initial Capital vs Earned Capital

Traders are always more concerned about protecting their initial capital, rather than gains beyond that amount. In fact, traders become careless with gains beyond the amount of their initial capitalization. For some strange reason, traders do not treat newly earned capital in the same way as initial capital. Of course, this is the height of foolishness. There is no difference between initial capit...

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  201 Hits
Oct
13

Can You Trust Your Intuition?

I am to some extent an intuitive trader. I suppose there are some who are much more intuitive than I am, and some who are less so. I'm convinced that most people who begin trading think of it in purely mathematical terms. If the ultimate multiple regression equation could be devised, one could simply put in the inputs and get the outputs. And the outputs could be used to forecast the markets. The ...

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  221 Hits
Oct
06

Frustration

From a letter I received: ...I'm so frustrated. I have far too many losses. Now I have an anxiety attack every time I trade... Can you help? Losses and setbacks can be the rule rather than the exception when it comes to trading. Discovering reliable trading strategies is not so much the challenge as is learning what to do when things go badly. Learning a strategy is one thing. Learning how to mana...

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  303 Hits
Sep
27

Relationships Part 2

Sometimes it pays to understand certain relationships. For some people it seems that understanding the relationships among interest rate bearing instruments is quite difficult For many traders, as well as for most of the general public, interest rates are intrinsically a subject of little excitement. How often do you find yourself lying awake at night worrying about interest rates? For most of us ...

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  226 Hits
Sep
21

Relationships Part 1

Any pattern that remains accurate over long periods of time merits notice. If the current market conforms to that pattern, trading potential appears. Is a seasonal strategy with unblemished performance due to fail? Such a question subscribes to the random-walk theory of price movement. It certainly ignores the probability that a pattern might have a seasonal effect and be caused by a seasonal fund...

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  234 Hits
Sep
15

Self-Confidence

Achieving the level of being a self-confident trader is a worthwhile goal for anyone who hopes to reach for consistency in trading. A self-confident trader is decisive. Self-confident traders carefully plan a trade, patiently wait for the ideal market conditions, and execute the trade according to plan. As a self-confident trader, you know which trade has your name on it. You recognize the trades ...

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  314 Hits
Sep
07

A Truth about Trading

A couple of things in life that I really don't look forward to are: 1. when they draw blood for my semi-annual health checkup and 2. when I have to go to the doctor. Yet, when I think about it, not going could be a lot worse than going. I don't know which I would dislike more, finding out I have too high a cholesterol reading or finding out that my blood sugar is too high. Hopefully, I'll never ha...

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  362 Hits
Aug
31

Learning to Expect Losses

There have been plenty of times during my trading career that I had to come from behind to turn a sure-loser into a winning trade. Believe me, trading can be pretty scary at times. However, sometimes you simply have to eat the loss and accept a fall. It is at that time you find out whether or not you can make it as a trader. Despite my best efforts, I sometimes find it hard to pick myself up after...

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  332 Hits
Aug
25

Big Picture

When you begin trading, the one thing you want most is success. You are trying something new. Most traders first starting out feel unsure, a bit uneasy. You're taking a chance with your hard-earned money; there is big risk involved. I don't know of any beginning trader who plans on failing, yet the possibility is there, and it is beyond your imagination to consider what you'll do next in the event...

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  281 Hits
Aug
18

Looking Ahead to Winter

Hey Joe! As a farmer/rancher, I'm already making plans for Winter. Can you help me with the relationship between grains and cattle? We need to begin with the fact that a trend is driven by change. Prices are highest when "things are so good they couldn't be any better!" Prices are lowest when "things are so bad they can't get any worse!" In between, new fundamentals emerge and supply/demand balanc...

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  235 Hits
Aug
11

Success Killing Plagues

I received permission from CEO Glen Larson of Genesis Financial Technologies to reprint an article he wrote. Years ago, I was one of Glen's first customers. It has been a pleasure to work with him and his staff since way back in the 1980s. Most of the charts you see here in Chart Scan come from Trade Navigator, the charting and trading program created by Genesis Financial Technologies. Glen writes...

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  321 Hits
Aug
04

Coming Back

Sometimes a stock, futures, or Forex pair you like to trade just seems to become un-tradable. You start having more losing trades than you would like to have. You find that what you have been doing just doesn't seem to work any longer. You are bored and frustrated. Although you wait patiently for things to get better, they don't get any better: in fact, they may become even worse. Finally, in desp...

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  366 Hits
Jul
28

E-Mini Russell 2000

Can you make money day trading the E-mini Russell 2000? I believe you can, and it's a question we often receive. The Russell is volatile and fast, but with the proper setups you can make your money in a matter of minutes. You will have to wait to see how best to manage the trades, and that will depend upon the success of your observations. But keep in mind that when people can't get decent fills, ...

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  419 Hits
Jul
21

Realistic Optimism

Jack and Jill have just started a small trading business. Jack says, "I can feel it. We're going to make a fortune. By this time next year, we'll be rolling in money." Jill counters, "I doubt it. That would take a miracle." Jack says, "You're such a pessimist. Why are you so bleak?" Jill argues, "I think we'll be successful. But I don't think it's going to happen overnight. It's going to take some...

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  395 Hits
Jul
14

Patience

If you are like most people, you want to make a fortune, and you want to make it now. It is a reasonable wish. Who wouldn't want to make enough money to make all their dreams come true? But such a future-oriented focus is often the undoing of many traders. Making money in the markets takes time. You have to wait for ideal market conditions and you have to build up the requisite trading skills to t...

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  360 Hits
Jul
07

Finding Stocks to Buy or Sell

Finding stocks to buy or sell is a tall order. Let me tell you one way I've done it for years. For those new to my writings, a trend is defined by a breakout of the #2 point of a 1-2-3 formation. A trend is established upon the breakout of the extreme of the defined trend. In other words, the breakout of a Ross Hook establishes the trend. A Ross Hook is created as a result of the first correction ...

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  358 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.