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Self Control

To become a truly successful trader you must become a truly committed trader. How do you get yourself to be in control?

Statistics and society may predict, but you alone determine whether you will succeed or fail. You alone are in control. You alone must take responsibility for your performance and your life. There are always tremendous opportunities in the markets. It is not what happens; it is what you do with what happens that makes the difference between profit and loss.

Many eventually successful traders move from trading method to trading method until they find one that suits them… one that is comfortable to run, and tests well first by back-testing, then forward testing and finally by real testing.

Some traders never stop looking for the "right" way to trade. THAT is a problem. There are many ways to trade that can generate nice profits over time. To settle on a right way for you to trade:

   • First, you have to believe in the process which leads to the generation of your entry signals. Does that process make sense to you?

Maybe you're a visual sort of person and you are drawn to Candlestick charting. Take the time to understand why the patters mean "reversal" and not just accept the "picture". Go deep.

     • Second, back-test and forward-test the method you decide to go with. In today's modern world of software, there's no excuse not to run all the back data you can through your method and see what the results would have been. Then forward-test to see how the method works out as each price bar appears on your chart. Be sure to use a statistically valid sample of trades for doing this.

    • Third, THINK about the process you are choosing and why it's right for you. THINK about the results you get from your back-testing and real-time testing of your system.

    • Fourth, BE A MACHINE (DON'T THINK) when you are trading your method.

This is why I am a huge proponent of mental training for traders. Unless you can control yourself, you can never control your trading. In order to control yourself and your emotions, you have to believe totally in the way you trade. Do the work. Do your thinking before you trade. Then don't think—just follow your plan. 

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Wednesday, 11 December 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.