Showing posts with the label trading-discipline-rules


LACK OF DISCIPLINE IN TRADERS Let’s say you are new to futures trading. Or let’s say you have traded futures in the past without much success and have decided to start fresh with a new approach and a clean slate. And you’ve done it all and followed every step. You have: • Determined how much money you can truly afford to risk • Opened a brokerage account with that amount of cash • Settled on a diversified portfolio of markets • Developed a trading system in which you have complete confidence • Developed specific, unambiguous entry and exit criteria • Back-tested your system and have generated good hypothetical results •Walked your system forward, paper traded it over new data and have generated good results • Sized your account so that you reasonably expect no more than a 25% draw down • Built in risk controls including stop-loss orders to minimize your risk You’re as ready as you can be. With high hopes and great anticipation you plac


GOLDEN RULES OF TRADING   Any trader’s system has to employ some kind of rules for themselves. The most important aspect is learning to execute these rules and, surprisingly enough, knowing when to break those rules. For me, breaking these rules resides in the part of trading when one moves from mechanical trading to including a more intuitive sense of the markets. Although everyone has their special set of rules, I have listed those by which I trade everyday. These Golden Rules of Trading have been developed by me over the years and should be memorized by the student. I suggest you print them on a poster and put them on the wall where you trade. The breaking of trading rules for the most part leads to confusion and losses. You will no longer be confident and exercise good judgment. I have had students toss out the rules by “trying things.” When you have fast profits, there is the temptation to experiment with them. If you are successful, at first it only reinforces b