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!

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Technique, psychology and money management are the three essential elements that must be mastered to become a successful trader. You’ve developed a money management system, you’ve got your head in the profit zone (see our posts dated July 19 & 20), now comes the hard part: developing a system and honing your technique.

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To be a successful futures trader you have to master three essential elements: technique, psychology and money management. Mastery and balance of all three elements is vital to success. In our last post we talked about the importance of money management. Today we’re going to discuss psychology.

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Success as a futures trader is dependent on your ability to master technique, psychology and money management. Life as a trader can be phenomenally successful, but it can be equally risky, particularly while you’re learning to dot the i’s and cross the t’s. It would be a mistake to quit your day job until you’ve mastered the three elements of successful trading. Master only one and your lack of knowledge and expertise in either one of the other two areas may bring you to the brink of disaster and topple you over. Remember, mastery and balance of all three elements is vital to success.

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With the right tools futures trading can be as easy as 1-2-3. Successful trading is 90% mental, 90% money management and 10% signals. So do you need to be a superman to become a successful trader? No, it only seems that way!

You do have to hone your skills, learn your trading system inside and out, develop a money management plan that works for you, and learn to read market signals. And you have to practice, practice, practice to develop confidence in your system and your abilities. Futures trading is not for the faint of heart. It’s a risky business that attracts the world’s best and brightest. A game of skill, futures trading is equally a battle of sharp wits and killer instincts. Develop yours and the world is your oyster!

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