Trading Educators Blog

​Someone asked, "What in the world is 'covalent bonding of futures pairs?'" Covalent bonding of futures pairs is said to create the best trading system portfolio structure. After the most stable individual futures parameters have been selected, the optimal portfolio should be created. Atoms share electrons to form molecules of a substance. This same covalent bonding process finds the trading syste...

You will need a system or plan if you want to succeed in trading. The usual way of attaining such a system is many days of trading, hard-earned personal experience, analyzing trades you've made to learn from your mistakes, a knowledge of probability, observing other traders, trade simulation, book learning, seminars and mentoring, or any number of similar factors. Such a system will give you ...

There are any number of reasons why a trader hesitates before a trade. The main one is lack of planning. Without a plan, there is no degree of confidence a trade will be successful, it's all wishful thinking. Unless they are outright gamblers, traders usually have a strong need to protect their assets and avoid risk. This is especially true for beginning traders. It can take a long time to build u...

​Have you ever spent the day making trade after trade and gotten nowhere? You may have wondered why you woke up that morning, or even bothered trading that day. Perhaps there have been a few days where you've felt this way this week. It's been a hard week so far. If you aren't doing very well, it is understandable. Uncertainty abounds. On days when you are feeling unproductive, it's important to h...

​Some have asked for more information about Point and Figure charts. Here's a message from our friend Braam: P&F as I do it is a whole different method of short term trading than you will find in any book. As I always want to improve myself, I have bought all books on P&F. Most of them were a waste of money. But the best I have ever read is "The Definitive Guide to Point and Figure" by Jer...

Recently, I was asked the following question: Do you trade strictly by technical analysis or do you still try to watch the fundamentals as well? For years I have differentiated between chart and technical analysis. Please allow me the courtesy of calling what I use as primarily 'chart' analysis, secondarily at times, technical analysis and when I think it is appropriate I throw in a bit of fundame...

I have to admit I do talk to myself at times, maybe even a lot, especially when I'm facing a loss. Let's say I'm down a bunch of points and it came as the result of a surprise move in the market. The temptation is to think, "I have to find a way to get it back." I hate ending the day down a bunch of money. However, if I give in to that thought, I am focusing on the loss and I'm no longer in the ma...

​The answer is yes. Such an event happened at the Comex a number of years ago! It was called the "Great Silver Fiasco," which was associated with the Hunt brothers. Silver made 19 consecutive moves to the downside, and destroyed several individual commodity traders, when the Comex Board of Directors changed the exchange rules to allow silver prices to fall and not rise. A "liquidation only" restri...

During ongoing activities, such as day trading, you have to learn how to pace yourself. This means alternating between times of intense activity with times of greatly decreased activity, times that require very little of your attention. These "rest periods" should take place when you do not have to quickly react to sudden market moves. This is hard advice to follow for some traders—paranoid, obses...

If you play tennis once a week against an opponent who plays tennis five times a week, who is likely to win? If you play chess or backgammon twice a year against someone who plays every day, who will mostly likely win? You don't have to start trading real money right away. Whenever someone goes through my mentoring program, there comes a time when I encourage the student to start paper trading bef...

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,...