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.
- There are some days when the demands and pressures of daily life — a fight with the spouse, that fender bender last night, a problem with one of the kids, a leaky roof, a meeting with your banker, etc. — will take up so much of your mental and emotional energy that you simply can’t concentrate. Don’t fight it. If you can’t concentrate fully, don’t trade.
- You may just feel uneasy for no explainable reason. The day may just feel “off” to you. If things don’t feel right mentally, no matter what your logic tells you, sit the day out on the sidelines. Lost opportunity is better than lost money. Don’t take a chance. If it doesn’t feel right, don’t trade.
- Successful traders practice good money management. If you’re trading with money you can’t afford to lose — mortgage money, retirement funds, life savings, money borrowed from a friend or relative, etc. — you’ll be trading scared. The pressure of what will happen if you lose the money will negatively affect your ability to trade successfully. You need a clear head — and a clear conscience — to trade at your best. Don’t trade scared. If you can’t afford to lose the money, don’t trade.
It takes more than knowledge to be a successful futures trader. You must have the self-confidence and courage to trade. Trading takes total concentration. If you can’t keep your head in the game, pack it in until tomorrow.
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