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Trading Educators Blog

#1 Trading Blog Site
Dec
21

Limiting Your Winners and Letting Your Losers Run?

Of course not! We hope for exactly the opposite. Just about anyone who traders or who teaches trading will tell you two things early in your conversation, "Trading is speculative, so only risk capital should be used," and, "Limit your losses and let your winners run." It makes perfect sense. You have to wonder why, with something so logical, we still find traders "letting ...

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  1059 Hits
Feb
20

Objective State of Mind

As you trade, have you ever heard a little voice inside talk about only what is going wrong? As the market moves against you, the voice whispers, "My money is on the line. What if I lose? What am I going to do? How will I meet my financial obligations this month? I need to win! The little voice moves you away from your ongoing, immediate experience to your emotions, what may go wrong in the next m...

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  1586 Hits
Nov
27

Hindsight

Do you remember your first impressions of trading? Perhaps you were young and had a strong desire to achieve early success, but if you were like most people, you had unrealistic expectations about the financial resources and skill level that were needed to trade profitably. You probably figured that you could just open a typical online brokerage account and turn $1,500 into a fortune. You probably...

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  1999 Hits
Nov
21

Protection

​It was a muggy day and I couldn't seem to do anything right. I fumbled around all morning. He hadn't slept the previous night. I was tired, and was tempted to just quit for the day, drink some ice-tea, and sit in a hammock by the pool. But I still had enough willpower to fight temptation a little longer. I had been working on a trading plan for the past month and I wanted to see it through. The d...

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  1833 Hits
Oct
17

Making a Comeback

​Have you ever had a bad day when nothing seemed to go right? First, you got up late. Second, your computer wouldn't boot up, and third, when it did, you couldn't seem to get in and out at the right time when executing even the most basic trade. What really upset you was when your Data line went down for 10 minutes during a critical moment in your trading plan. Traders face setback after setback, ...

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  1780 Hits
Oct
10

Intuition

​If only humans were more like machines. In theory, the ultimate trader would act like a robot, analyzing market data with unfailing accuracy, devising a trading plan, and executing it without flaw. But does trading work that way? Trading is more art than science. Without an intuitive grasp of the markets, it's difficult to successfully trade the markets using short-term trading strategies. Humans...

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  1646 Hits
Aug
29

Emotions

​Winning traders are extremely disciplined. They wisely study the markets, devise a trading plan, and follow it. They control their impulse to abandon their plans prematurely, and they don't allow emotions, such as fear and greed, to influence their trading decisions. In the trading profession, emotions often get a bad rap, however. There are critical moments of investing when it's vital to contro...

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  1767 Hits
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 formu...

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  1777 Hits
May
10

Impulsive Trading

​Why do so many traders abandon their trading plan? Is it their personality, an inherent pitfall of the trading profession, or temporary insanity? A host of factors may contribute to a lack of discipline. Depending on your personality, background, training, and experience with the markets, you may have trouble reigning in your tendency to act on impulse. For some people, impulsivity is in their na...

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  1806 Hits
Feb
08

Visualization

Under what conditions would you like to trade if you had your choice? You would probably want to trade in a strong bull market, be way ahead so that a loss wouldn't hurt at all, and have a foolproof trading plan. In addition, you would want to have a mental edge. You should be in a good mood, alert, and ready to take action. We can't always trade under such ideal conditions, however. If you are a ...

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  1610 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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  1656 Hits
Apr
22

Ready to Lose

Imagine what you would do in the following scenario. You have been looking at a position for a week. You had a clear and simple trading plan: Just wait for an announcement at the end of the week, watch prices jump, and then sell. As might be expected, things aren't working as you had planned. First, no clear trend has emerged; prices are moving chaotically up and down. Second, it's been two days s...

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  1740 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.