Trading Knowledge For Success in the Futures Market
Greatness is a product of hard work
Proper trading knowledge is the key to success in the futures market. You can go all the way back to the Bible, and it will inform you about the importance of wisdom. Proverbs tells us that wisdom is the principle thing, and to go get wisdom and understanding. All of the great traders and investors throughout history worked hard at acquiring the knowledge necessary to become elite. This is how they made fortunes trading the various markets. There is no shortcut to becoming a world-class trader.
Study and learn as much as you can
If you want to achieve success in the futures market, you simply must put in the time and effort necessary to acquire the proper trading knowledge. Success comes from knowing, and following proven, fixed rules. Those who lack knowledge usually guess, or follow the advice of television personalities. This is a certain recipe for disaster. Successful trading has nothing to do with luck. Learn from the world's best traders and investors, past and present. This includes William J. O'Neil, Jesse Livermore, and W.D. Gann. Read their books. Study their strategies, methods, and principles. Implement what you learn into your own trading.
Do not base your trading decisions on emotions
One of the biggest mistakes new traders, and even experienced ones make, is to be influenced by emotions such as fear, greed, and hope. One way to remedy this, is to implement a successful trading plan that fits your personality. If you only follow signals directly from your plan, it will help you to trade only on facts, and not emotions. Do not underestimate the importance of proper trading psycholodgy. It is a major part of your overall trading knowledge that will lead to success in the futures market.
Charts will give you great information
If you properly study the price movements and volume on a chart, they will tell you more about what is going on than any analyst, television personality, or broker. Charts are an excellent source of past history, with clues to future price movements. There are several recurring price patterns proven to be successful over many decades. My personal favorite is the flat base pattern. I have traded it successfully for over 20 years. Price and volume analysis is absolutely crucial if you want to be a consistently successful trader. You want to judge a commodity, stock, or any general market by its action.
How to successfully trade
Following a clear trend is one of the major keys to making a lot of money trading the various markets. If a market is in a trading range, have the patience to wait until it clearly breaks resistance or support. Then go with the flow of the market. Do not buck the trend. Remember to always practice sound money management. This can be achieved by strategically placing stops immediately after you take a position. Once the market goes your way, implement trailing stops to protect profits. You must practice sound judgement throughout the entire process. This comes from proper trading knowledge and experience. You can become a consistent winner in the futures market or the stock market.