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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.

Sep
21

Easy Trading

Throughout the day you make everyday decisions that mean little to you. You drive your kids to school and along the way, you make a host of decisions about which route to take, where to turn, or when to stop off for gas. Each decision is made with little thought. Later in the day, you may decide to stop off at the supermarket. You decide what to buy for dinner and how much you will spend. Do you o...

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  1998 Hits
Sep
13

Are You Worried?

​After reading the financial page on Wednesday night, Jim thought, "How could anyone invest in the markets and get a sound night's sleep?" After you saw the major indexes drop on Wednesday, you might have thought the same thing. But as a seasoned investor or trader, you realize that such corrections are commonplace and you've learned to take them in stride. You don't worry about it and know that i...

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  2057 Hits
Sep
06

Stay Calm

​Charles is on edge. He isn't extremely uptight but he isn't completely calm either. He is just a little fidgety and it's getting to him. He is having a little trouble concentrating. He's reading charts incorrectly and he is having trouble outlining a trading plan. He can't figure out where to place his stops, where to enter or where to exit. Can you relate to Charles' plight? There are times when...

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  2037 Hits
Aug
31

Self-Sabotage

​Every time Dino gets ahead as a trader, he sabotages his efforts. It comes about in many ways. He may feel guilty for getting ahead, and so distraught over his success that he doesn't pay attention to market conditions. This leads to a few bad trades, wiping out a month's worth of profits in a day. Other times he may seemingly forget to stick with his trading plan, which results in a significant ...

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  2032 Hits
Aug
24

Dream Trade

When trading the markets, it's vital to stay grounded in reality. You can't get caught up in dreams. For instance, it may sound "easy" to people outside the profession to make money by trading Google, but there are a couple of real obstacles to taking home huge profits. First, risk should always be considered when making a trade, and while trying to manage risk, some traders would not want to take...

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  1782 Hits
Aug
18

Fighting Spirit

When trading the markets, you can't merely sit back and wait for the profits to roll in. You have to take an active approach to trading. You must search the markets for new opportunities. That can mean looking through stacks of boring reports, scanning through a hundred charts, or working as an amateur specialist to see if anything can give you an insight as to how prices will move. If you want to...

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  1661 Hits
Jul
31

Your Money or Your Ego?

​Which would you be willing to part with first, your money or your self-esteem? If you are like most traders, you are likely to let your money go before your self-esteem. Trading stories are full of traders who gladly fed losing trades to avoid admitting the fact that they made a mistake. They hoped against hope that a losing trade would turn around if they could merely wait long enough. In the en...

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  1859 Hits
Jul
27

Trading Preparations

Are you ready to tackle the markets at any time? Bring it on, right? It would be ideal if we were ready to trade at any given moment, but the human mind has its limits. You don't have an endless supply of energy. After a marathon stretch of trading, for example, you may not be able to tackle the markets in earnest. You may not be able to concentrate fully. You may be easily distracted, and while y...

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  1927 Hits
Jul
20

Be Humble

​Seasoned traders observed long ago that after a series of wins, a trader is vulnerable to over-confidence and trading errors. It's quite understandable. Trading is a competitive business, and when you win, someone else loses. Market participants trade because they are greedy for profits, but often sell out of a fear of losing. How do many traders deal with the inevitable feelings of uncertainty a...

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  2205 Hits
Jul
14

It Takes Guts

​Short-term winning traders have guts. They have to. No one has a crystal ball. You can guess what the markets will do, but you can never know what will happen with complete certainty. Only the traders who risk enough money, and make enough winning trades can hope to achieve glory. And living under these conditions takes guts. Trading can be about 90% market psychology. Do fundamentals play a role...

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  2174 Hits
Jul
01

Self-Control

You're in the midst of a perfect trade. You entered where you had planned, and you know when to exit. All you have to do now is wait for the price to reach 53 and sell. But it's not moving fast enough. It seems to be hovering around 51 and 50. You're starting to wonder whether or not it will ever move up. Panic sets in and you sell. About an hour later, the price hits 53 and it now seems obvious t...

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  1765 Hits
Jun
29

Timely Exit

​What is your tolerance for pain? Consider the following scenario. You have 10% of your account balance on the line. For the past two days, prices have been going in the direction you had anticipated, but today, an announcement was made that caused a market move that caused all your profits to be wiped out in an hour. What will you do? See if prices will move back to where you are okay again? At t...

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  1955 Hits
Jun
21

Overconfidence

​How should a trader deal with "overconfidence?" Maybe a better question about confidence--trading and otherwise--is not why people are overconfident to begin with, but why they stay overconfident. You see, the problem with overconfidence is not the innate bias toward optimism that most people seem to possess. That's a good thing it keeps the world moving forward. The problem is the inability to t...

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  1487 Hits
Jun
15

Confidence

When it comes to trading the markets, nothing is certain. How do you cope with uncertainty? Many traders are overconfident. Rather than face the possibility of losses due to market uncertainty, they fool themselves into thinking they are omnipotent. Behavioral economists Brad Barber and Terrance Odean illustrated how novice traders are especially overconfident. They analyzed account records from a...

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  1633 Hits
Jun
06

Efficiency and Success

How much time do you spend preparing for the trading day? Do you spend hours scouring the markets for a winning trading opportunity? Do you watch hours of commentary or read all the major financial newspapers? You don't need to spend hours and hours reading about the markets if it doesn't directly lead to a profit. For example, most media coverage of the markets is for entertainment value, so spen...

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  1832 Hits
May
31

Greed

​In the movie "Wall Street," Gordon Gekko argues, "Greed is good." Greed can motivate you to strive for perfection and keep you persisting in the face of adversity, but greed has its downside. It is often said that the markets are driven by fear and greed. The masses have a natural desire for wealth and all the advantages that money can buy. In their zeal, the masses invest in stocks and believe t...

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  1799 Hits
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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  1935 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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  1837 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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  2103 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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  1956 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.