Every minute more than 150 Million Dollars change hands in the electronic index futures markets like the e-mini S&P and e-mini NQ. You can win or lose thousands of dollars in a few minutes; the futures markets can make you rich in a few weeks or months or wipe out your account with no mercy.
If you want to compete in the “game of games” and play against the best traders in the world, then you need to get ready. Too many gamblers are entering the arena without any plan or strategy, completely unprepared, and that’s why they lose.
Trading a system will dramatically increase your chances to succeed in trading because it eliminates five of the top six reasons why unprepared traders fail.
Let’s take a look at the reasons why traders lose money:
- Lack of a Trading Plan
- Lack of Discipline to Follow the Plan
- Failure to Control Emotions
- Failure to Accept and Limit Losses
- Lack of Commitment
By all means y, you have to avoid these mistakes if you want to win. Here’s how a trading system eliminates the reasons why traders fail:
1. Trading plan
A trading plan is a road map for how to trade, and no trades should be placed without a well-researched plan. The plan is written down and followed. It is not altered unless it is found not to work (make money) or the trader finds a way to improve it. Having a trading system means having a predefined set of rules you have developed to guide your trading. Therefore you have a trading plan, eliminating the No.1 cause for failure. A trading plan should be written in stone, but is subject to revaluation and can be adjusted along with changing market conditions.