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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 how the trades are working out. If you use indicators look to see if they are in agreement with your perception of the price action. If you anticipated a good trade setup from the indicator, is that what actually happened? Was it good enough that you would trust it again? Traders who attempt to "trade in the zone," try to get the feel of the price action. They want to be in step with the ups and downs of price movement.

Some days you just may not be as good as you are on other days. When you are not in tune with the market, it should be a signal to you that "this" isn't your day. If it isn't, don't trade. Every trader has trading slumps, periods when trades just don't seem to work out.

During slumps, it simply doesn't make sense to keep trying. You are not fit to trade, so don't. You will not be trading at your best.

Professional traders suggest standing aside when you or your trades are not having a good day. Ultimately, it's a good idea to take a break from trading, to try again later. The break may be hours or days. When I'm in a slump, I take off an entire week. I don't begin trading again until I see trades and markets going my way. 

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Monday, 23 September 2019

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.