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…)
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…)
Practice makes perfect, my mother used to say. It’s as true of futures trading as of anything else. Before you put your hard-earned cash on the line, you need to practice trading if you want to succeed as a futures trader.
Making practice trades allows you to: (more…)
Successful futures traders have learned that there are times with NOT trading is the most successful strategy. Achieving success as a futures trader is 90% mental preparation. If you are not mentally prepared, do NOT trade. It can be dangerous and financially disastrous to trade if you are distracted, angry, worried, scared or emotionally distraught. Just as physical illness, tiredness or pain prevent you from focusing on your trading, so does emotional distress. You must have your head in the game every second to succeed as a futures trader. (more…)
Show me the money! In a nutshell that’s the goal of futures trading: to make money. Charts track money. They peel away the rumors and the news reports, the CEO’s prognostications and your neighbor’s hot tip. They show us what master day trader Oliver Velez terms the footprints of money (ref. Tools and Tactics for the Master Day Trader by Oliver Velez and Greg Capra). (more…)
If you learn to make your losses work for you, they can become your ally, not your enemy. Last time we talked about loss and how it can galvanize you to refine your system and improve your approach, setting you up for success as a futures trader. It’s like they say in sports, “No pain, no gain.” Loss motivates you to learn. (more…)
You’ve heard the maxim: A win is not always a win and a loss is not always a loss. It’s true in many aspects of life and particularly in futures trading. Making a profit does not always indicate a correct trade. Likewise, losing money does not always indicate a wrong trade. What is essential for futures traders to realize is that the inherent rightness or wrongness of your trading method can not be determined by the outcome of any one single trade. Those who incessantly tinker around with their system, trying to fine tune it to perfection after every trade, are doomed. Those who jump from system to system, searching for that elusive perfect system, are doomed. (more…)
Many traders new to futures trading make the mistake of thinking in terms of stocks. Futures trading is concerned not with individual stock performance but with the macro logic of the market. Futures traders watch the indexes, not the stocks. Remember, the market is always seeking equilibrium, constantly oscillating between previous highs and lows. Futures traders use support and resistance to gauge the range of the day and locate potential market turning points. Learn to successfully and consistently locate these turning points and the spread becomes your playground — and cash cow! (more…)
Curious about futures trading? Want to see how we pros do it? I have prepared a short video that takes you through the start of a typical market day. Click here to watch the action. (more…)
When is it a safe bet to enter a continuation trade? Always look back to the most recent support or resistance (more…)
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