Trading Educators Blog

Are traders naturally born to trade? Can anyone learn to trade? What is the ideal psychological profile of the winning trader? At Trading Educators, we have tried to find answers to these questions, but definitive answers are often elusive. We keep trying, though. We've surveyed traders and interviewed them. And we have tried to analyze the interviews made by others. Our conclusion: There doesn't ...

You must risk money to make money. It is sad, but true. You cannot possibly make profits in the markets unless you take some risk. Many people hate taking risks, especially with their money. However, risk is a part of everyday life. We take risks all the time, even when we complete the most mundane tasks, such as driving our children to school, or flying home to visit our family for holidays. We e...

As a beginning trader, Chuck had just put on his tenth trade. He was still new to trading, but he was optimistic that he would be successful. He wanted to succeed. He thought, "I want to prove that I'm a good trader. I hope I do well on this trade. The outcome is critical to the rest of my trading career." Chuck's thoughts and feelings are understandable. Whenever we start a major endeavor - start...

A bird flaps its wings. A storm strikes miles away. According to Chaos Theory, a seemingly irrelevant action can precipitate, and contribute to, a major event. The right set of factors comes together, and a major event takes place. It's easy to imagine an unlikely chain of events that may initiate a market move. A housewife attends to her crying child who has tripped over the newspaper, and in doi...

Sometimes I get some really strange questions in the mail. The one that follows is one of them. Although I try to be like "Rambo" when I trade, I haven't in actuality fully achieved "Rambo's" degree of "coolness." "Is it really true that you are able to stay calm and relaxed when you trade? Are you saying you have never cracked under pressure?" There have been times when I made mistakes under pres...

This is good advice outside of Trading as well. "Have you ever had a bad day and wanted to stand aside until the feeling passed? Sometimes it is a good idea. It may be necessary to take a break, relax, contemplate, and refocus on the task at hand. The winning trader trades freely and effortlessly and it is vital to trade with such a mindset. Traders are similar to star athletes who perform at thei...

Traders are always more concerned about protecting their initial capital, rather than gains beyond that amount. In fact, traders become careless with gains beyond the amount of their initial capitalization. For some strange reason, traders do not treat newly earned capital in the same way as initial capital. Of course, this is the height of foolishness. There is no difference between initial capit...

I am to some extent an intuitive trader. I suppose there are some who are much more intuitive than I am, and some who are less so. I'm convinced that most people who begin trading think of it in purely mathematical terms. If the ultimate multiple regression equation could be devised, one could simply put in the inputs and get the outputs. And the outputs could be used to forecast the markets. The ...

From a letter I received: ...I'm so frustrated. I have far too many losses. Now I have an anxiety attack every time I trade... Can you help? Losses and setbacks can be the rule rather than the exception when it comes to trading. Discovering reliable trading strategies is not so much the challenge as is learning what to do when things go badly. Learning a strategy is one thing. Learning how to mana...

Sometimes it pays to understand certain relationships. For some people it seems that understanding the relationships among interest rate bearing instruments is quite difficult For many traders, as well as for most of the general public, interest rates are intrinsically a subject of little excitement. How often do you find yourself lying awake at night worrying about interest rates? For most of us ...

Any pattern that remains accurate over long periods of time merits notice. If the current market conforms to that pattern, trading potential appears. Is a seasonal strategy with unblemished performance due to fail? Such a question subscribes to the random-walk theory of price movement. It certainly ignores the probability that a pattern might have a seasonal effect and be caused by a seasonal fund...

Achieving the level of being a self-confident trader is a worthwhile goal for anyone who hopes to reach for consistency in trading. A self-confident trader is decisive. Self-confident traders carefully plan a trade, patiently wait for the ideal market conditions, and execute the trade according to plan. As a self-confident trader, you know which trade has your name on it. You recognize the trades ...

A couple of things in life that I really don't look forward to are: 1. when they draw blood for my semi-annual health checkup and 2. when I have to go to the doctor. Yet, when I think about it, not going could be a lot worse than going. I don't know which I would dislike more, finding out I have too high a cholesterol reading or finding out that my blood sugar is too high. Hopefully, I'll never ha...

There have been plenty of times during my trading career that I had to come from behind to turn a sure-loser into a winning trade. Believe me, trading can be pretty scary at times. However, sometimes you simply have to eat the loss and accept a fall. It is at that time you find out whether or not you can make it as a trader. Despite my best efforts, I sometimes find it hard to pick myself up after...

When you begin trading, the one thing you want most is success. You are trying something new. Most traders first starting out feel unsure, a bit uneasy. You're taking a chance with your hard-earned money; there is big risk involved. I don't know of any beginning trader who plans on failing, yet the possibility is there, and it is beyond your imagination to consider what you'll do next in the event...

Hey Joe! As a farmer/rancher, I'm already making plans for Winter. Can you help me with the relationship between grains and cattle? We need to begin with the fact that a trend is driven by change. Prices are highest when "things are so good they couldn't be any better!" Prices are lowest when "things are so bad they can't get any worse!" In between, new fundamentals emerge and supply/demand balanc...

I received permission from CEO Glen Larson of Genesis Financial Technologies to reprint an article he wrote. Years ago, I was one of Glen's first customers. It has been a pleasure to work with him and his staff since way back in the 1980s. Most of the charts you see here in Chart Scan come from Trade Navigator, the charting and trading program created by Genesis Financial Technologies. Glen writes...

Sometimes a stock, futures, or Forex pair you like to trade just seems to become un-tradable. You start having more losing trades than you would like to have. You find that what you have been doing just doesn't seem to work any longer. You are bored and frustrated. Although you wait patiently for things to get better, they don't get any better: in fact, they may become even worse. Finally, in desp...

Can you make money day trading the E-mini Russell 2000? I believe you can, and it's a question we often receive. The Russell is volatile and fast, but with the proper setups you can make your money in a matter of minutes. You will have to wait to see how best to manage the trades, and that will depend upon the success of your observations. But keep in mind that when people can't get decent fills, ...

Jack and Jill have just started a small trading business. Jack says, "I can feel it. We're going to make a fortune. By this time next year, we'll be rolling in money." Jill counters, "I doubt it. That would take a miracle." Jack says, "You're such a pessimist. Why are you so bleak?" Jill argues, "I think we'll be successful. But I don't think it's going to happen overnight. It's going to take some...