Trade Futures Successfully Using These Seven Trading Secrets

Posted on August 3, 2008
Filed Under Forex |

Trading is an activity which has great rewards but also requires a great deal of effort before becoming successful at it. In may ways it can be likened to many professional skill based sports like tennis or golf, there are no overnight success stories. More often it is the result of years of training and practice, learning the skills required until they become 2nd nature. Here are seven of the key skills that you must develop as a trader.

1. Futures markets are just like any other market wether it be stocks, options or bonds. They will obey the laws of techincal analysis as well as any other market, providing there is enough volume to make the market liquid. So when trading futures look for support and resistence, trendline and chart patterns. Learning techincal analysis is not as hard as most people think, you just need to spend enough time looking at charts because it is really a visual skill.

2. Always have a trading plan before you enter the trade, and more important than your entry point is your exit point. Your exit strategy could include multiple points including several price targets where profits are taken and a stop loss point.

3. Keep your losses small!, this is the one thing that every trader must do if they want to stay in the game for a long time. By doing this you will preserve your capital allowing you to trade another day. Your small wins will compensate your small losses allowing your big wins to give you an overall profit

4. Don’t over trade, this another big mistake that amateurs make. The pros are more patient and cherry pick only the best trades when the probabilities are on their side. This takes patience and discipline. These are two of the essential skills that you must develop in your game.

5. Keep both a daily and weekly log of all your trades. It is essential that you follow up with all your trades, both good and bad, to learn what your mistakes were. To become a very good trader it is simply a case of eliminating all your mistakes. This does not mean that you don’t have loses but it means that you followed your trading plan and kept your losses small.

6. Prepare for each trading day by getting a good nights sleep. In the morning before the market opens review your rules, charts and trading plan. You must be focused on the plan and not get distracted by other things that maybe going on in your life. Make sure that you are mentality prepared for the trading day ahead by being confident in both your self and your trading plan and rules.

7. Before using your hard earned cash in real trades make sure that you have done sufficient paper trades to give you confidence in your trading system. Paper trade until it becomes boringly successful, then you know that you are ready to use real money.

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