Fitness for Futures Traders
by Norman Hallett, former CTA/Trader, of
You've got a great trading system. So why are you
You've done your homework. Countless hours of seeking
out the right guru (or piecing together your own system).
Weeks of monitoring your guru's daily trade picks (or
paper-trading and back-testing your homemade system).
You've done it by the book. No seat of the pants trading
for you! OK, now you're confident. It's time to put your
money where your homework is.
You've had your coffee and your first trade signal is
before you. Confidence high. Trade made. First loss. Not
a problem. You understood before you started that successful
traders both win and lose and "losing is part of
the overall winning". You've also heard more then
once that "successful traders don't win on every
trade." Moving on, still confident. Next trade made.
Another loss, but this one hurt your pride a little because
you got stopped out early in the trade, and then the market
rebounded and would have hit your profit target if you
weren't stopped out. You double check. Yep, you placed
the stop where your trading system told you to place it.
You kind of had a feeling that the early weakness in the
market was just profit-taking from the previous day's
trading, but you're trading a system and you must stick
to it. Wounded, but resilient.
After a good night's sleep and a few mouse clicks, your
new daily trades are in front of you. Hey, this one looks
good! It's a little bit more risk than yesterday's trades
had, but look at that profit potential! With a smiling
face, the trade is executed. With a nice start to the
trade, you're feeling good and you've moved your stop
to breakeven, just like your system said. Surprise piece
of news - market reverses - blows through your stop -
an "unexpected" loss. Is something wrong with
the system? Has the overall market "personality"
changed, affecting your system to the Core, rendering
all your back-testing irrelevant? Your confidence turns
You decide to "watch" the next trade
I mean, isn't it wise to make sure the system gets back
on track before you "throw good money after bad?"
Isn't that what a conservative trader does? Trade watched.
It wins! In your head, you beat yourself up a little because
you know that when you started your "live" trading,
you made an agreement with yourself to take the first
10 trades "no matter what"
and here you
wimped-out and missed a big winner that would have gotten
What's happening is that you are out of control. Your
emotions are ruling your trading. The above scenario plays
out in every trader from time to time.. newbee and veteran
alike. The winning trader senses what is happening and
nips it in the bud. The winning trader spend time EVERY
DAY, working on "the discipline of trading".
Reads a chapter in his favorite psychological trading
book, scans the "ten commandments of trading"
that hangs on the wall over his/her desk, listens to his/her
mental training software for futures traders
before trading begins.
There are many more losing traders than winning traders
and it's seldom about the trading system. In my career,
I've come across at least 50 systems that I consider A+,
yet I know for a fact that MOST traders that have traded
on these systems have lost. Why? They were not in control
of their emotions. Are you?
Norman Hallett is the CEO of Subconscious
Training Corp. TradingMind Software offers traders a valuable
trading tool to improve the mental/emotional discipline
of professional traders.