This is you being delusional. Believe me. I betrayed myself too many times before committing to my systems. You dont win every time if you follow your methods but you dodo a hell of a lot better.There is a time and place for throwing caution to the wind and just going for it. Trading is the worst place for that kind of bullshit. The adrenaline that comes from the potential of losing thousands of dollars in a minute is enoughyoure mission is to keep a cool head.James Altucher talks about how he created algorithms for each of his methods and then let them trade for him while he was depressed an losing everything. I wasnt smart enough for this (and my methods inevitably had some level of subjectivity to them) and so I manually entered all my trades. (Entering a trade or putting on a trade or entering a position just means youre buying (or selling short) into a market.)A. Some days you will feel like a worthless human being who has done and never will do anything worthwhile. You will enter trades you arent supposed to because youre afraid of missing out. You will exit trades before you should because your stomach is weak.B. The next day you will make a winning trade and feel like a god. You will forget whatever it felt like to lose and you will make trades outside of your method. You will enter trades you shouldnt because you have the feeling that you cant do wrong (the market may validate you for a couple days and make the problem worse). You will stay in trades too long because you know that the market will turn in your favorno way could you be wrongYour trading decisions need to come from numbers and predetermined rules. After years of deliberate practice and success you may actually get an intuitive feel for the market. Then begin introducing those feelings into your systems. Before then, no way Jos.This isnt a joke. Most people shouldnt trade. If youre not willing to give everything to the market then its not worth messing with. Do what Warren Buffett says and put your money in the Vanguard SampP 500 index fund and go about your life. (Or invest in your own business.)Of course, as terrible as trading is, its also freaking awesome for the right people. To this day I get a warm fuzzy feeling when I see a price chart. Im not joking. I feel at home and I see patterns and I get the urge to dive in Maybe I will again. Who knows.This method required constant awareness of price movements but not a lot of action. With this method you probably wont be making more than two trades a weekoften youll make one every other week. Its also a bit unique in that we are trying to spot tops and bottoms of markets, something that most people will tell you is suicide: like catching a falling knife.Companies that trade over a certain amount of contracts are required to report the trades they make. These are collected in reports called Commitment of Trader Reports. You can get these reports here. You can get them in a more useful form (a chart) here.We can see a great multiyear low (which is more obvious in the weekly chart, note that this is a daily) and some consolidation. Okay, lets see what the producers are doingthis information is available to us in the red line in the mini-chart below the main one.My partner was able to make such insane returns because he caught a great runand leveraged it to the hilt. He put on a huge position and then used all the profits from each movement to make his position even bigger. That means youvegotto hit a home run.I honestly cant recommend anyone do that. This method alone demands more risk than most (even though youcan use mini contracts to take smaller positions). I played more conservatively and did well. When I trade again, Ill trade even more conservatively. Capital is the first requirement for tradingwithout it youre out of the game.1. Adding to the position. We talked about this a little earlier. Essentially you can add to a position thats working to double down. Say you get a strong movement in your favor, then it pulls back a bit to consolidate, you can add to your position to double-down on the move.2. Adjusting our stop-loss.This is the one you will use most often (as in every winning trade). I like to move my stop-loss to my entry price as soon as possible. This means that if that market moves against you then you still dont lose any money. I will normally wait until there is a new solid level of support created and then move the stop loss up to this new level. A support level is a price at which there is resistance to the market moving below. This is usually created by a small pullback. Continue to adjust your stop losses as the market moves in your favor.3. Reducing our position (taking money off the table).I alternated between taking 50 of my trade off the table when I had 100 and never reducing a trade unless I got out completely. Often taking 50 or 30 at a certain point is a good way to lock in trades, the only problem is that it limits your upsides.You probably noticed that I didnt give you any examples of perfect patterns (if you go back and look at a more magnified version of the lumber one youll see a perfect setup). Thats becauseit takes a massive amount of work to find a great trade.I may have to look through 200 more charts before finding adecentsetup.If youre really interested in this, go to BarCharts (or download a trading platform, I like thinkTDA) and look through every single commodity futures chart you can find. Look at a 5 year chart, then if one looks promising look at a 1 year chart, then a 6 month.I was going to recommend more books for you to read but Im not. If you want them in the comments Ill offer some up but the important thing is for you to actually apply this knowledge first. Go and spend an hour looking at charts right now.Thanks for taking the time to read this Let me know what you think - the good, the bad, the ugly - in the comments below. Im an entrepreneur (more in the StartupBros About Page) in St.
