rounded corner
rounded corner
top border

50 Important Tips From Professional Futures Traders

Reprinted with permission from XPRESSTRADE.

Reasons 1-10

1. Many futures traders trade without a plan. They fail to define specific risk and profit objectives before entering the market. Even if they establish a plan, they tend to "second guess" it and don't stick to it, particularly if the trade becomes a loser. Consequently, they overtrade and use their equity to the limit, which puts them in a squeeze and forces them to liquidate positions. Usually, they liquidate the good trades and keep the bad ones.

2. Many traders don't realize the news they hear and read has, in many cases, already been figured into market prices.

3. After several profitable trades, many speculators become wild and reckless. They base their trades on hunches and long shots, rather than sound fundamental and technical reasoning, or put too much of their money into one trade that "can't fail." If the trade does fail, they can wipe out their entire trading accounts.

4. Traders often try to carry too big a position with too little capital, and trade too frequently for the size of the account. Essentially, they're impatient and undercapitalized. It's far better to begin slowly, and develop a trading methodology, without too much money at risk initially.

5. Some traders try to "beat the market" by day trading, nervous scalping, and getting greedy. They overtrade and usually end up whipsawing themselves in the market.

6. They fail to pre-define risk, add to a losing position, and fail to use stops. Trailing stops, in particular (which are offered by XPRESSTRADE), are an important risk management tool used by many successful traders. Essentially, the stop price adjusts automatically as the market moves in your favor, so that your profits are allowed to run, but you always have protection. 

7. They frequently have a directional bias; for example, always wanting to be long. With futures, remember, it's just as easy to sell ("go short") as it is to buy ("go long"). You can go short before you go long!

8. Lack of experience in the market causes many traders to become emotionally and/or financially committed to one trade, and unwilling or unable to take a loss. They may be unable to admit they have made a mistake. Or they use the markets too feed their need for excitement, an almost sure way to lose.

9. They overtrade. When you don't see a good opportunity in the markets, don't trade simply for the sake of trading. Keep doing your homework, and try to identify a real opportunity.

10. Many traders can't (or don't) take the small losses. They often stick with a loser until it really hurts, then take the big loss. This is an undisciplined approach; a trader needs to develop and stick with a plan.

Next chapter: Reasons 11-20

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2019, a product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy