Psychology is the most important component of successful trading. Regardless of whether a trader uses discretionary methods or a mechanical trading system, the proper mindset differentiates successful traders from others.
Six Keys to Success in Trading Futures
1 Correct Mindset
2 Commitment
3 Proper Capitalization
4 Position Sizing
5 Money Management
6 Be Responsible for Your Own Trading
Gordon Gecko was wrong. Greed is not good. (Gecko was the character in the movie "Wall Street.") Greed, fear, anger and all emotions can be a trader's downfall.
Success in trading is its own reward. The money is merely a by-product of that success--not the goal.
Discipline is the one quality that all traders must possess. This is the ability to master your mind, your body and your emotions. Know yourself. Your risk tolerance, your experience and your capitalization will play the biggest parts in determining what you will trade, and how. Lose your ego. Letting your ego influence your decision-making is the easiest way to end your career as a trader.
Five Common Trading Mistakes
1 Trading without a plan or with a poor plan
2 Losing your discipline. Not enough patience.
3 Trading without stops. Canceling stops.
4 Hanging onto a losing position. Turning a winner into a loser.
5 Too much risk. Not enough capital.
A great trader who has made tens of millions of dollars from the stock and commodities markets said the one individual universal reason for failure in trading is the inability to take a loss. The true path to riches lies not with the wins but managing the losses in a prudent and confrontational manner.
The true path to success always must journey through failure. The true winner in futures trading is the one who perseveres. The race is a marathon, not a sprint.
Why to traders and investors fail?
1 Limited trading capital.
2 No experience
3 No psychological preparation.
You are responsible. Win or lose, you are responsible for the outcome. Don't blame the market or your broker. Losses are an opportunity to focus on the problem. Don't get caught up in personal denial.
There is no Holy Grail. There is no get-rich-quick scheme. There is no free lunch. No one else can do this for you. If something sounds too good to be true, it probably is. When it comes to trading, there is no "hoping," no "wishing," and no "praying." There is just the cold, hard reality of the market.
Looking at timeframes when trading a market, start out with the longest first. This would be the monthly charts, then the weekly charts, then the daily charts, and then even the hourly or minute charts. You begin with the bigger picture and work your way down to smaller timeframes.
W.D. Gann's Four Essential Trading Qualities:
1 Patience
2 Knowledge
3 Guts
4 Health and Rest
There you have them. Of all the seminars I have attended, and all the books I have read, and all the successful traders I have personally interviewed, there is a common and very important theme that comes to the surface: Trading success comes less from the specific types of trading methods you employ or the types of markets you trade, or what trading timeframes you use. Trading success comes more from knowing yourself, knowing how to control your emotions, and forgetting about your ego.
Six Keys to Success in Trading Futures
1 Correct Mindset
2 Commitment
3 Proper Capitalization
4 Position Sizing
5 Money Management
6 Be Responsible for Your Own Trading
Gordon Gecko was wrong. Greed is not good. (Gecko was the character in the movie "Wall Street.") Greed, fear, anger and all emotions can be a trader's downfall.
Success in trading is its own reward. The money is merely a by-product of that success--not the goal.
Discipline is the one quality that all traders must possess. This is the ability to master your mind, your body and your emotions. Know yourself. Your risk tolerance, your experience and your capitalization will play the biggest parts in determining what you will trade, and how. Lose your ego. Letting your ego influence your decision-making is the easiest way to end your career as a trader.
Five Common Trading Mistakes
1 Trading without a plan or with a poor plan
2 Losing your discipline. Not enough patience.
3 Trading without stops. Canceling stops.
4 Hanging onto a losing position. Turning a winner into a loser.
5 Too much risk. Not enough capital.
A great trader who has made tens of millions of dollars from the stock and commodities markets said the one individual universal reason for failure in trading is the inability to take a loss. The true path to riches lies not with the wins but managing the losses in a prudent and confrontational manner.
The true path to success always must journey through failure. The true winner in futures trading is the one who perseveres. The race is a marathon, not a sprint.
Why to traders and investors fail?
1 Limited trading capital.
2 No experience
3 No psychological preparation.
You are responsible. Win or lose, you are responsible for the outcome. Don't blame the market or your broker. Losses are an opportunity to focus on the problem. Don't get caught up in personal denial.
There is no Holy Grail. There is no get-rich-quick scheme. There is no free lunch. No one else can do this for you. If something sounds too good to be true, it probably is. When it comes to trading, there is no "hoping," no "wishing," and no "praying." There is just the cold, hard reality of the market.
Looking at timeframes when trading a market, start out with the longest first. This would be the monthly charts, then the weekly charts, then the daily charts, and then even the hourly or minute charts. You begin with the bigger picture and work your way down to smaller timeframes.
W.D. Gann's Four Essential Trading Qualities:
1 Patience
2 Knowledge
3 Guts
4 Health and Rest
There you have them. Of all the seminars I have attended, and all the books I have read, and all the successful traders I have personally interviewed, there is a common and very important theme that comes to the surface: Trading success comes less from the specific types of trading methods you employ or the types of markets you trade, or what trading timeframes you use. Trading success comes more from knowing yourself, knowing how to control your emotions, and forgetting about your ego.
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