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Trading Educators Blog

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Sep
12

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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Aug
15

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'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
01

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

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

​ 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
04

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

​ 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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Jun
24

What is a mental stop and should I be using them?

What is a mental stop? Why are traders afraid of them? Are they worthwhile? Why would anyone want to use a mental stop? Let's begin with why anyone would want to use a mental stop! It is usually preceded by your having been stopped out of the market only to have the market reverse and go the other way, causing you to miss a possibly profitable trade. That being said we can now address the question...
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295 Hits
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Jun
23

State of Mind

​ Making profits as a trader is often a matter of trading in the proper state of mind. Trading expert Dr. Van K. Tharp, author of several best-selling books on trading psychology and head of the Van Tharp Institute, describes three states of mind that may dictate how you approach trading. As traders gain experience with trading the markets, they move from a "having" state of mind to a "doing" stat...
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521 Hits
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Jun
19

Staying Relaxed

Experience and trading from a plan can help you to make trades in a carefree, relaxed, and focused manner. It is important that you avoid putting unnecessary pressure on yourself. Success or failure is not riding on a single trade. You make it as a trader in the day-to-day trading, learning to be satisfied with what the market hands you. Avoid thinking you have to be right. You cannot impose your ...
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382 Hits
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Jun
13

You Need Control

The need for control is the biggest psychological impediment to profitable trading. Traders strive to control the markets, but in the end, they find that they must accept their fate and settle for controlling their emotions. When your money is on the line, it's difficult to remain calm, rational, and in complete control. You want to win, and there is a strong need to want the market action to fall...
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503 Hits
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Jun
06

Persistence is Needed in Trading

​ Trading is a profession where dare not give up in the face of adversity. You must go into the trading day expecting to have losses. It's not the most optimistic outlook, right? Trading in today's markets isn't like trading in the steadily upward trending markets in the days before the advent of a PC that could let you see charts. In the days when markets trended as opposed to swinging, just abou...
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423 Hits
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Jun
06

Trouble Winning

There has been great interest in the markets lately, so there's no reason that you shouldn't take home huge profits, right? Although many traders profit, there are some who still can't seem to make a profit, even during relatively good times like these. Let's consider some of the psychological impediments that may limit success. The most obvious reason for an inability to win is a lack of experien...
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476 Hits
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May
30

Worry-Free and Profitable

Even though there is great interest in the markets these days, and more opportunities than usual, it's vital to approach trading with the proper mindset. You can't try to do too much, too fast. Successful traders approach trading with a carefree, focused attitude and putting added stress on yourself interferes with attaining this peak performance mental edge. When you are in the proper mindset, yo...
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532 Hits
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May
22

Where the Public Go Next?

​ Even during a strong bull market, you have to do your homework. Many stocks will go up while the public is interested in trading the markets, but not all stocks are equal. Some will go up dramatically while others will barely move. If you want to trade like a master trader, you must closely study the markets to find stocks that are likely to go up. Despite the necessity of studying the fundament...
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426 Hits
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May
22

Believe in Trading

​ Is there anything we can believe when it comes to trading? Is it all lies and fakery? Trading is a challenge. Tens of thousands are drawn to trading, but few last more than a few months. Trading is presented in such a way that it appears to be easy, so it's difficult to face the truth that trading is difficult—at least until you can get the hang of it. Many beginning traders need to win. They ar...
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416 Hits
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May
10

Technical or Fundamental Analysis?

​ There are a number of reasons that many traders favor technical analysis over fundamental. For starters, fundamental traders tend to be commercial firms; that is, they are involved in the actual production or consumption of a commodity. The commercial firms have the information that most of us cannot afford to acquire. For example, are you able to go out and check global soil conditions in an ag...
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252 Hits
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May
10

Is Trading all Lies and Fakery?

​ Trading is a challenge. Tens of thousands are drawn to trading, but few last more than a few months. Trading is presented in such a way that it appears to be easy, so it's difficult to face the truth that trading is difficult—at least until you can get the hang of it. Many beginning traders need to win. They are hoping that the huge profits they make trading will solve many problems in their liv...
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363 Hits
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May
03

Hoping to Break Even

​ Jim has been holding a position for six months. A media analyst predicted the stock would hit $100 by the end of the year. He bought it at $75. It went down to $50, and it's on the way back up. During the recent interest in the markets, Jim is hoping that it will hit $75 so he can sell it and break even. The break-even point is critical. When you are on the losing side of a trade, all you can do...
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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.