Part of my newsletter from a couple of months ago. If you would like to get ,my daytrading updates for stock futures indices, e-mail me at
ilan@cannoncapital.com
7 steps to succeeding in day-trading the minis (broker's perspective)
I sent this one a couple of months ago. I really think it deserves a re-transmission for it's value + for the new trades that are reading this newsletter. If you have been with me for a while - look back and see if you were able to progress from you were a couple of months ago.
I came up with the following as a personal opinion after servicing online traders for almost 5 years. In the next few e-mails I will share more on each of these observations with you but first the general concept. keep in mind that some of these steps can be switched around as far as order, some of these steps are always required and that each one of you is different and may relate to the different stages in different ways.
1. Education - Hopefully if you are already trading you have done this part as far as initial education: contract specs, trading hours, brokers, platforms, risks & opportunities in futures etc. The second type of education is constant in nature and relates to trading techniques, the evolvement of markets, diff. trading tools etc.
2. Find a system - I am definitely not referring to go on the web and subscribe to a "black box " system (buy/sell triggers that you don't know why they are being generated). What I am referring to is a trading technique, general set of rules, trading concept etc. As you progress you may put the different rules and indicators into a computerized system, but you don't necessarily have to as long as have a trading approach/system and you not just coming in the morning "blank".
3. SURVIVAL - This is the key! do what you need to do in order to survive this brutal business and give yourself the chance of being here down the road with more experience and better chances of succeeding. Survival is probably the biggest key for beginner traders and I will expand much more in the coming issues. There is a saying in this business "live to trade another day" it is so TRUE!
3a. money management - While it is closely related to the survival it can also be on its own. The survival part is that you must set yourself with trade/daily/weekly loss limits. It is also closely associated with the risk-reward (again, per trade and per time frames)
4. GOALS: you have to have a game plan and set goals which will function as road map while you are trying to progress and improve. Goals should also range from the "per trade basis" to daily goals, weekly goals etc. I am going to EXPAND much more on this as we progress. Many of you who are clients are familiar with these questions:
what is your daily profit goal? where do you see yourself in a week from now? 6 months from now? a year from now? how are you planning to get there?
5.Experience - if you made it to this stage you are on the right track! Just like anything in life, the more experience you have the better you can be at something. The key (associated with survival) is to have the experience without paying for it in too much capital, what good is the experience without the risk capital in your trading acct???
6. Learn your set ups (also learn your weaknesses and strengths): Get to the point that you can recognize different set ups, that you feel comfortable and confident with to "attack". You can not make it to this stage with out the prior steps. If you did not survive, developed a trading system, have goals etc. - you may recognize set ups, but will not have the confidence, cash etc. to take advantage of the set ups. I sometimes compare it to being the "pro" , the vulture who is waiting PATIENTLY for the pray and then attacks when the time is right!
7. Trading/day-trading/swing trading on a consistent, successful basis, which means you will continue to evolve as a trader and go through these stages over the years.
Don't be discouraged by reading this , succeeding in futures trading takes hard work and TIME. However, you do need to be realistic, make sure you only try this with risk capital and periodically check yourself and try to improve.
Good trading!
