“Your actions affect your attitude and your attitude drives your actions. It can indeed be powerful to get your actions and your attitude working consistently in the same direction.”

As we enter a new year, I find these words from the Daily Motivator of particular import to my life as a futures trader. More than anything else, your daily attitude affects your ability to perform successfully as a futures trader. If you stay positively focused, you will be able to assess your position will confidence and pull the trigger at the precise moment to ensure maximum profitability. Allow negativity or self-doubt to eat away at your confidence and you will fail. (more…)

There are a number of qualities that define a successful futures trader — the keys to success.

1. Discipline. Discipline is the primary key to successful futures trading. You must have the discipline to learn your system, study it daily and tweak it to perfection. You must have the discipline to keep a trading log that records your trades, as well as the market conditions, thought processes and external influences that affected each trade. Without such a log, you are doomed to repeat your mistakes, rather than learning from them. You must have the discipline to do your homework, to study and keep up with the market, to keep your system current.
2. Patience. You must be patient if your trading system is to be effective. By trading too soon, you negate the value of your trading system. You must exercise patience and give your system time to work.
3. Loss. Loss is part of the trading game. You must be able to take losses in stride and get right back in the game. When your system dictates that a loss be taken, you must have the discipline to follow your system, take the loss quickly, minimize the damage and move on.
4. Perseverance. There are no overnight success stories in futures trading. Success is a matter of building experience, working and perfecting your system, minimizing losses, and capitalizing on small gains. Success, particularly at the beginning, is more often a series of small steps than giant leaps.
5. Confidence. Above all, a futures trader must have confidence in himself. You must have confidence in your system and your ability to work your system — to pull the trigger. Futures trading is a game of risk. You can’t be afraid to act. You must have confidence in your ability to read your system and act. Those who hesitate are doomed to lose in the futures trading game.
6. Flexibility. The market and market forces are ever-changing. You must have the flexibility to change with the times, to make changes to your system so it remains viable and in tune with current market conditions.

There are four key elements to achieving success as a futures trader:

1. Self-confidence
2. Discipline
3. Ability to handle loss
4. Profitable trading system

Self-confidence. If you aren’t confident that you can become a successful futures trader, you might as well pack it in now and save yourself a lot of grief. Successful futures traders are bold, aggressive and self-assured. They do not lose faith in themselves when they lose. They have the courage and self-confidence to keep trading. Futures traders are risk takers. We are the Mario Andrettis of Wall Street. (more…)

Futures traders come in all flavors but it’s basically a Neapolitan world. You can be a scalper, swing trader or a combination trader. Mindset and methodology generally determine in which sector of the futures trading world you’ll thrive.

Scalpers. Scalpers seek immediate gratification. They look for short-term market movements seeking to shave money off the bid/ask price spread. Holding each position for only a  very short period of time (often only minutes) to minimize risk, scalpers make small gains through rapid trading. (more…)

Futures contracts are complex financial instruments and trading them demands constant daily, even hourly, monitoring. When you trade futures, there are myriad shifting variables that must be monitored continuously. Trading futures is about minimizing risk and maximizing profits. Profits are often made on small price points in an interval of minutes. To make money, you have to be there, in the game, ready to grab an opportunity when it appears. (more…)

We’ve been talking about charting basics lately and the signals charts give the futures trader. But signals are worthless if you fail to act. To be a successful futures trader you must not only know when, but have the courage to act. In futures trading, we call this pulling the trigger. (more…)

Understanding the risk/reward ratio and incorporating it into your futures trading tactics is essential if you want to succeed as a futures trader. Learning to use the risk/reward ratio can help you minimize your risks and maximize your trading profits. (more…)

Just as a craftsman keeps his tools sharp, clean and well organized, so must a futures trader keep his “tools” in peak operating condition. A futures trader’s ultimate tools are his mind and his body. Yes, we use systems, triggers, indicators, charts and other tools and tactics — all important. But without the human trigger they are useless. If you do not take care of your physical and mental self and keep yourself in peak trading condition, you will not be able to maintain the level of concentration, stamina, quick reflexes and clear thinking necessary to succeed as a futures trader. (more…)

There are certain psychological characteristics that can negatively impact your ability to succeed as a futures trader. Learn to recognize these behaviors in yourself and guard against them.

• Cheapskate. Many people are foolishly cheap. They are so anxious to start trading on the futures markets that they ignore the necessity of first acquiring the proper education, tools and software to succeed. These people will lose more money in their first round of trades than they would have spent on the tools that would have allowed them to succeed. You can’t be “penny wise but pound foolish,” as my grandmother would say. Don’t nickel and dime your training budget. If you truly want to succeed as a futures trader, spend the money to learn from the best and acquire the best tools available. Click here to hear what my students have to say and learn more about my Futures Trading Secrets Course.
• Impatient. We lived in a society increasingly driven by instant gratification. We don’t want to wait for it or earn it; we want it now! Futures trading is a fast-paced, risk-filled environment that seems to attract people who like to live in the fast lane. These people are so blinded by the dream of instant wealth that they neglect their training, fail to take the time to develop a reliable system, refuse to stick with their system and, as a result, crash and burn. As grandmother would say, “You have to crawl before you walk and walk before you run.” If you want to succeed as a futures trader, slow down and take the time to learn the ropes and develop and practice your system.
• Greedy. Futures trading is not the way to get rich quick, though some seminar organizers use that as a marketing ploy to lure the unwary. Successful futures traders are not  gamblers. You cannot succeed by trading out of greed or desperation; or as my grandmother would say, “A fool and his money are soon parted.” Using emotion as a basis for trading is a quick path to failure. Success futures traders learn all they can, develop their system, work it and stick to it. Success as a futures trader comes from accumulated profits (often small at first), not one big score.
• Overconfident. If you want to succeed as a futures trader, park your ego at the door. Ego distorts rational thinking. The overconfident trader allows emotion to rule his actions. He is so certain that he is right that he will overstay a position to avoid admitting he was wrong. The market is fluid, ever changing. A futures trader must be fluid and able to change position to succeed. You will never be smarter than the market; the market will always win. As grandmother would say, “Pride goeth before the fall,” to which granddad would add, “Don’t bump your nose on the way down”

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The power of the media to lead public opinion has been demonstrated time and again. While the fourth estate would argue that they are merely reporting the news, they do, in fact, manipulate – and to a certain extent create – the news, particularly with regard to the economy and the markets. The market is a reflection (some would say, prediction) of national and world economy. In part, market movement is driven by the emotions of people, their confidence or fear, satisfaction or greed. (more…)