Trading Educators Blog

From time to time we get this very important question: Is trading a sin? Often this question comes from people in ministry who want to become traders in order to fund various church activities. The answer is: No, trading is not a sin, but trading without knowing what you are doing can lead to a lot of problems. Trading in and of itself is not considered to be gambling. The futures markets exist as...

​Almost anyone who wants to succeed needs to ask themselves certain questions before beginning to trade. Essentially, it is a matter of counting the cost BEFORE, not after you decide you want to pursue trading as a serious part of your life. What time period trader are you? How long do you feel comfortable holding a trade and how such financial risk can you comfortably assume on a one contract bas...

​Have you ever made a dumb mistake? Perhaps you knew you should have used a protective stop before leaving for two days to take your children on a road trip. You may have thought, "I'll stop off at an Internet café and monitor the trade." But it didn't happen. You got wrapped up taking care of your children or worrying about traffic, and you didn't get around to looking at the market. It fell hard...

 There are three foes you must overcome in order to become an adequate trader. The first foe is fear. If a trader runs away out of fear and avoids trading, nothing will happen except that he will never learn. Fear causes your logic to become fuzzy and unclear. Lack of clarity becomes the second foe you have to overcome. Clearness of mind about the trading process removes fears. If you yield t...

​Reality is subjective. There are different states of reality in the same way that there are different states of mind, or different states of emotion. After a series of setbacks, for example, the world can look bleak. Yet after a series of big wins, in contrast, you can feel euphoric, even omnipotent. So which is the true reality? This is a hard question to answer. Perhaps it is best to consider t...

Once a trade is entered, there are two possible outcomes: Win or lose. Between the two is the breakeven point, and because it is in-between, it's psychologically significant. Losing is involved with fear and hope. Winning is involved with greed. When on the losing side of a trade, the breakeven point is a place that inspires hope. Being human we have a natural tendency to avoid risk and loss. When...

​Learning to master the markets can sometimes seem like climbing a tall mountain: You know it can be done, but you don't know how to do it, or whether you could do it if you had to. The task may seem insurmountable, and as you think about it, daunting. Fully mastering the markets takes time; time is needed to gain the vast experience required to trade in a variety of market conditions, and the adv...

Many traders are smart enough to know that they will win in the long run by taking only the best trades, but become impatient due to the lack of anything happening. They forget that the long run can be "long". Taking only the best trades can be frustrating. They come along rarely, and even when they do there is no guarantee of winning with them. Long gaps occur in between. We can become angry and ...

Trading is a challenging profession. Many seek out success, but few make it. The markets don't always cooperate with your plans. You can trade all day, and work hard at it, but you can still end up losing money. Thinking of the big picture helps ease the pressure. You can calmly think, "What's there to worry about? It's just one trade among many. It's just one day. There are many more days to trad...

Let's get one thing straight. Fear, for the majority of traders is a very real thing. You have it, I have it. Others have it as well. In order to become a professional trader, you must learn to deal with fear. The first step is to acknowledge that you have, which is what you have done. Once you admit to fear, you can begin to deal with it. When you notice the impulse to trade based on strong fear,...

​Although I haven't the faintest idea of how to play chess, it certainly seems like a great idea. I imagine you can improve stock and futures trading by learning how to play chess. It might also help to develop an interest in physics. Every trader should learn to develop his problem-solving and pattern recognition abilities. I've been told that nothing does this better than learning how to play ch...

Your trading goals and objectives must be possible to complete. They cannot be too abstract or too high. It is best to just execute a trade rather than being overly concerned with profits or achieving unrealistic performance standards.You must be able to intensely concentrate on what you are doing. While trading, it's vital that you have a detailed trading plan and control risk so that you can foc...

​Yesterday, Jack went over to his best friend Tom's house to look at his new Porsche Turbo. Jack has wanted a Porsche since he was a teenager but could never afford one. Four years ago he taught Tom how to trade. Tom's been doing great ever since. Each year he has made greater and greater profits, even during bear markets. Jack can't help but envy Tom's success, yet at the same time, he berates hi...

By being flexible I mean that over time, your trading philosophy will undergo changes. These changes are brought about because of external events (economic considerations, natural disasters, political events, etc.), and because of internal events, usually my own mistakes. My views change as economic, political, and technological changes occur both on and now off our planet. My views change as I se...

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...

​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...

Sometimes in softball games, as a kid, they handed out the bats, balls and gloves, and there weren't enough to go around – so you had to sit it out. You had to sit on the bench and watch. The same thing happens in trading. Sometimes you don't get to participate. You must get used to the idea that sometimes you will sit in front of your charts for days or weeks, and nothing at all will happen....

​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...

​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 ...

I believe that to be a truly successful trader you have to have a true passion for trading. This is probably true for any field of endeavor. I believe that the people who do best are not primarily motivated by fame, glory, respect, or status. They are driven by the pure love of the what they do. Winning traders, similarly, have strong interests in the markets, and this passion is the driving force...