THE 10 COMMANDMENTS OF TRADING, excerpt, from bclund.com
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Remove your emotions
Understand that you will lose on more trades than you will win on; that is just part of the game. If you are the type that always has to be “right” you are going to have a hard time becoming a successful trader. The market is perpetual, it continues on no matter what you think about it with no knowledge that you exist.
Cut your losses
It’s pretty simple. You will not make it in the markets if you can’t cut your losses. You have to be confident in yourself as a trader to know there are an infinite amount of opportunities in the markets and that you can capitalize on them. That gives you the ability to let the losers go.
Trade less make more
Be picky about your trade setups and only take the best ones. The goal is to take the least amount of trades needed as over time even the best traders will lose on more trades than they win on.
10 THINGS I WISH I KNEW WHEN I STARTED TRADING, excerpt, from bclund.com
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You will be wrong, a lot
Ted Williams was one of the greatest sluggers in the history of baseball, but he couldn’t get a hit 60% of the time he was at bat. The hardest thing for most traders to get through their thick skulls is that being wrong most of the time is part of the game.
You will be wrong. You will be wrong a lot. A whole lot. Embrace it. Learn to accept it. As long as you cut your losses quick and maintain good risk/reward ratios on your setups you will make money over time.
It’s all about the Benjamins
This one may seem obvious but when I first started trading I was more interested in showing how smart I was by doing something most people didn’t understand. I spent a lot of time telling non-traders about the markets and making myself feel important.
I bought books, software, and attended seminars because I thought it was cool to be a trader. But all the while I was losing money in the markets.
Ask yourself this question, and be honest. What’s more important to you, having everyone you know idolize you because you’re “trader”, but lose money, or have everyone think that you are just some schlub who works in an ice cream store, while in fact you are really making a fortune in the markets?
Trading is ONLY about making money. If you can’t do it on a regular basis you are not a trader. Everything else is just conversation.
The reality is, you just don’t exist
Everyone has an ego. We all suffer to an extent from illusions of self-importance. Problem is, the markets don’t just consider us unimportant, they don’t even acknowledge our existence. Nothing about our lives or what happens in them means anything to the markets.
Good person or bad. Flush with cash or scraping by just trying to make your rent. Tall, short, pretty, ugly, it doesn’t matter one bit.
Did you stay out too late drinking with your buddies last night? Is your mother dying of cancer? Did your wife yell out “give it to me good Juan the pool-boy” the last time you made love to her? All of that is as irrelevant to the markets as you are. And if any of those things affect the way in which you approach your trading, the market will run you over like a freight train.
Everything you know about life is counter intuitive to the markets
From the time you are first able to comprehend “value” you are taught that cheaper is better. If you want to buy a new refrigerator you wait for it to go on sale. Then you try for a discount because they have discontinued that model. And you get them to knock even more off because it is a floor model. You want to pay the least you can because it is a wasting asset.
In the markets that is exactly the wrong thing to do. A share of stock, option contract, or basket of currency is only worth what the next person will pay for it. You buy strength and sell weakness. You never average down and you pyramid up. All-time highs are to be bought and all-time lows sold. You sell good news and buy bad.
You have to understand that when you set foot into the world of the markets that the normative rules of value and worth, as well as your inbred ideas of consumer psychology no longer apply.
U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This "index.html" page is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this "index.html" page. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade.
The high degree of leverage that is obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. There is no guarantee that you will profit from information from this website. Past trade records are not necessarily an indication of future results.
If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account.
Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a "limit move." The placement of contingent orders by you, such as a "stop-loss" or "stop-limit" order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.
Travis Bickle, and anybody associated with Travis Bickle, is not licensed to provide investment advice, nor are they required to be under SEC guidelines. The suggestions given to you from this "index.html" page should not be taken as investment advice directly, indirectly, implicitly, or in any manner whatsoever, including but not limited to trading of stocks on a short term or long term basis, or trading of any financial instruments whatsoever.