“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 is an art to pulling the trigger that futures traders must learn if they are to achieve success. Setting up and learning your system, studying and knowing the market, reviewing your charts and watching your indicators — all these important elements of futures trading come together in that critical moment when you pull the trigger. (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.

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…)

Retracements are a key charting tool used by futures traders to predict price movements and select entry points. The key value in retracements is that they keep the successful futures trader grounded in reality. They provide traders with an objective view of actual market movement. They help futures traders keep their hopes and fears in check and deal with market movement dispassionately. (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…)

In 1982 the futures markets started trading options. The appeal of trading options as opposed to futures is the potential to increase profit — often substantially — while limiting risk.

What is an option on a future? An option gives the buyer the right but does not obligate him to buy or sell a particular futures contract at a set price at any time prior to a specific date. When the option is exercised, it is the actual futures contract that is delivered to settle the transaction, not cash. (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…)

If you’re going to be a successful futures trader, you have to learn to take emotion out of the equation. Learn to trade like a robot. There’s no room for emotion in futures trading.

Futures traders learn to trust themselves and their system. If you start letting emotion rule your decisions, fear, anger and greed will undermine your carefully planned and practiced strategies. It is by persistently following your system, by dispassionately relying on what your charts tell you, by religiously following your indicators that you will succeed as a futures trader. (more…)