Trading Educators Blog

Today I am looking at a so called ratio spread: Long 1 November Soybean and short 2 July Corn. The spread looks interesting to me because it is trading at a level where it could turn around again and follow its seasonal pattern to the up-side. The current level (approx. 235) has provided support several times. The seasonal statistic looks promising as well, with 17 winning trades in a row. But thi...

Trading is a business where you expect to see more losing trades than winners. Expecting to win is apt to produce more disappointment than joy. That doesn’t mean you won’t have a high percentage of winning trades, but it is safer to anticipate otherwise. To the beginning trader, especially, this fact of life can be stress producing and somewhat disappointing. How you cope with losses i...

Trading for a living involves more than getting in and out of the market at the right time, and more than thinking about moving averages and indicators. Trading is a business, not just a job, and every business in the world has to be managed. Every business involves the managerial functions of organizing, planning, delegating, directing, and controlling. If you, the trader, are to perform these fu...

Conclusion It is critical to develop a well thought out and organized trading plan. It is then important to have the discipline needed to follow it. Diversify your trading into several unrelated markets, or focus on one market and time frame where you have seen you can make money. Trading, by its nature is not investing. Trading requires consistent monitoring on at least a daily basis because of t...

Manage the Trade Once you get into a trade, you must eventually get out. Some argue that this is more important than where you get into a trade. My experience has been that any fool can get into the market, but it takes a successful trader to consistently get out with a win. As I follow the markets, I find there are four reasons to get out of a trade. Prices move significantly against my position....

Some time ago I spent 4 days in a Forex trading office, teaching and working with the traders there. It was interesting to see how these traders speak with one another, and to listen to what they say. I couldn’t help making some observations which I will now share with you. If you are a part- or full-time trader, you may have enjoyed the attention this wild and wooly occupation brings at social ga...

Follow the Markets After you've determined your strategy and the market or markets you will trade, you can start following the price action. It is important to follow each market consistently and see the trading opportunities as they develop. Jumping around from one market to another often leads to missed or late execution of your method. I think it's important to let the market tell you what to d...

Please listen to the following podcast when you have a few minutes: https://www.bloomberg.com/news/audio/2017-03-03/the-incredible-true-story-of-the-real-life-trading-places I found the podcast interesting because of a few facts I want to discuss in today’s blog post. First of all, I am also a believer that trading can be trained but not necessarily everyone can trade. Trading requires a cer...

“I’ll worry about it later?” When trying to deal with the fact that we must eventually cope with an unpleasant event, such statements help us get through life. We often put off things we don’t want to do, hoping that we will gather enough energy and enthusiasm to deal with them in the future. Take your taxes for instance. Do you wait until the last day to pay them? Why not start working on your ta...

Diversify:  Next, you'll need to choose which markets to follow. Diversification is one of the crucial factors in the success of some, but not all trading plans, and may in fact make the difference between success and failure of the plan. Putting all your eggs in one basket is not a good idea for some traders. This approach takes the position that rather than trading ten contracts in one mark...

  If your financial losses have injured or hurt your personal relationships, you must apologize and ask those persons for their forgiveness. Most people will forgive you immediately but whether or not they forgive you is unimportant. It is most important that you forgive yourself and resolve not to repeat the same mistakes. It’s also important to realize that if the offended person does...

How to Get Started:  I've seen many different trading plans. Whether they're two paragraphs or ten pages long, they put forth a way of looking at the market and they attempt to create some framework for approaching the markets. A good plan will include a well-tested strategy, a trading method, or a setup. Having a positive expectation should allow you to have the confidence to start t...

When you put your money on the line, it's hard to avoid getting a little emotional. Beginning traders may be especially prone to experience a roller-coaster ride of emotions, feeling euphoric after a winning streak, yet disappointed after a string of losses. How well do you handle emotions? Winning traders control their emotions. They don't let their emotions control them. But emotions don't happe...

Discipline is the Key:  You will need discipline in several areas to be successful. First you'll need the discipline to make a plan, rather than shoot from hip. Without discipline, many approach the markets like a craps table and they can expect the same results; short-term successes based on luck and long-term losses based on randomness. Second you'll need the discipline to follow the plan. ...

People don't want to be changed. They don't want to be told that they need to change. Do you ever find yourself struggling in those areas? Thank you for your honesty. If there is a struggle, that means there is a battle for truth. If you're not battling, you've already lost. Truth has been lost and deceit has won. We must come to a place where we are willing to unclothe our soul, ultimately, compl...

Develop a Trading Plan The main message, I want traders to understand is how important the disciplined execution of a well thought out trading plan is in today's markets. Nobody knows for sure what a given market will do next. Having a plan of attack will allow you to successfully cope with the uncertainty that is an inherent part of trading. I think it makes good common sense to have a well t...

Winning traders must identify profitable trading strategies. It's a creative process. Much like scientists find evidence to support a theory, traders must formulate hypotheses and determine whether their proposed strategy can produce a profit. You must sift through a wealth of information, mentally testing and retesting your hypothesis and trying to decide if it will work when the ideal market con...

Recently, someone sent me the following question: “Just how committed does a trader need to be?” I don’t know that I can put a number to that. For instance, on a scale of 1-10 how committed should a trader be. But if I had to evaluate it on that basis, I would say he must be a “10.” What is the value of commitment? How do you measure such a thing? Most people have an “interest” in becoming consist...

  Today I am looking at a very “strange” butterfly spread: Long 1 April Feeder Cattle and one May Corn and short 2 Live Cattle August. I have to admit that it is difficult to find an entry into this trade by looking for chart patterns but it is easy to see the possible support around the current level. OK, the spread moved a bit lower in July last year but this happened when there was not eno...

You need to find other things to do while padding the time waiting for better trades. Try to study the markets or different ways of trading, or simply do something completely different like going to the beach. It is critical that you learn to enjoy yourself in ways other than being in a trade. The fact is, if you are trading in a professional way, you are out of the market much of time. So you nee...