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50 Important Tips From Professional Futures Traders

Reprinted with permission from XPRESSTRADE.

Reasons 31-40

31. Many traders over-trade their accounts. Futures traders tend to have no discipline, no plan, and no patience. They over-trade and don't wait for the right opportunity. Instead, they seem compelled to trade every rumor. The old saying is absolutely true: "Sometimes, the best position you can have is no position at all." You don't always need to be in the market.

32. Staying with a losing position because a trader's information (or worse yet, intuition) indicates the deteriorating market is only a temporary situation.  This self-deception can lead to large losses. Learn to admit when you're wrong, and don't be afraid to throw in the towel on a losing trade. Regroup, and look for the next opportunity.

33. Lack of risk capital in the market means inadequate capital for diversification and staying power. Just because you have a $20,000 trading account doesn't necessarily mean you need to put on $20,000 worth of positions.

34. Some speculators don't have the temperament to accept small losses, or the patience to let winners ride.

35. Greed, as evidenced by trying to pick tops or bottoms, is a frequent error.

36. Not having a trading plan results in a lack of money management. Then, when too much ego gets involved, the result is emotional trading, rather than trading based on sound research and analysis. Check your ego at the door before trading.

37. Frequently, traders judge markets on the local situation only, rather than taking the worldwide situation into account. It's important to remember that all financial markets are increasingly global.

38. Speculators allow emotions to overcome intelligence when markets are going for them or against them. They don't have a plan to follow.  A good plan must always include defense points (stops) -- these are points at which your losses should be cut.

39. Some traders are not willing to believe price action, and thus trade contrary to the trend.

40. Many speculators trade only one commodity. Don't try to trade so many markets simultaneously that you can't properly follow the markets. But putting all of one's eggs into a single basket, so to speak, is foolhardy.

Next chapter: Reasons 41-50

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