risk management Archives • Futures Day Trading Strategies

Posts Tagged Under: risk management

How Lack of Trading Discipline is Killing Your Performance and the Steps You Can Take to Improve It

 

This article on Trading Discipline is the opinion of Optimus Futures.

Imagine, if you will, two traders. One trader holds a superior trading strategy and ample capital resources to make it work. But he lacks discipline. The other trader has a mediocre system, fewer capital resources, but superior trading discipline. The non-disciplined trader has everything going for him, except for himself; whereas the disciplined trader has a few things working against him, but his ability to remain disciplined serves as his core strength.

Who might end up becoming the more successful trader? The answer is that it all depends on a few other things: the ability to adapt to situations, the smarts to assess what’s working and what’s not, and the “discipline”

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Stop Trading the P&L! Establishing a Proper Trade Exit Strategy

 

Read the Chart and do not Trade your P & L

The reason many traders fail when it comes to exiting trades is because they focus solely on the money they can potentially lose or win instead of making market-related decisions. This is also called “trading your P&L,” where traders completely detach themselves from their charts and market context and respond only to their account balance and the unrealized profits on their futures trading platform. (P & L stands for Profit and Loss)

Improving Profit Taking & Exiting Trades

Profit-taking or loss, or exiting trades in general, is arguably more important than entry timing because how you exit your trades determines the long-term outcome of your P&L. However, most traders don’t spend much time on developing their trade exit strategies and are often uncertain of even how to exit. This results in emotional trade management driven by impulsive decisions with no clear plan.

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A better way to scale into and out of positions

 

Scaling into and out of positions is a common practice traders use to increase their chances for success when taking multiple entries and exits on their trades. However, there are a few things traders typically overlook when it comes to scaling into and out of trades.

Usually, traders don’t follow a rule-based or thought out position sizing and risk management strategy. This unfortunately often leads to wrong interpretations of trade management opportunities and false risk management decisions.

 

Bad practice I – scaling out of trades

Most traders will probably have done this before: partially closing a trade where price has moved into your favor to realize some of the profits and also to take off some risk. Whereas this is a good decision when it’s backed by price analysis, most traders cut their profits too early. The fear of giving back unrealized profits dominates the thinking of many traders and they will

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How boring is your trading? Why professional trading should be boring

 

You often read that trading should not be exciting and that professional trading has to be somewhat “boring”. But what does exciting or boring in the context of trading really mean and how can you adopt a trading route that is more “boring”?  In this article, we show you the 4 different stages and types of trading, how excitement influences trading decisions and what a professional (boring) trading routine should look like.

Profitable Trading is BoringThe new trader – unconscious excitement

New traders don’t understand what trading is all about and how to approach the market in an efficient way – and it’s totally normal to start out this way. The new trader believes that trading is an activity where he can increase his net worth just by making a few investments;

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Can you use time as your stop-loss factor?

 

Time as a concept of Stop-Loss

Time is often factor in trading that is completely overlooked, but it can help traders make potentially better trading decisions, increase the bottom line and help cut losing trades effectively. Regardless of current trading style and system, the trading-time component can be used by all types of traders to improve their decision making process and add a completely new layer of due-diligence to trading. This is simply another variable you can use with your stop-loss.

The time stop – an introduction

Do not confuse the concept of the “time stop” with holding time or any other time related performance metrics. Whereas holding time only calculates how long you hold your trades, the “time stop” concept sets price action in relation to time and evaluates price movements based on how ‘fast’ they happen, or don’t happen. The time stop concept helps you look beyond price action

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