Discipline in trading is a HUGE deal and one thing many tend to struggle with. I cannot stress enough the idea of just making $300-$500 a day and stopping. Most traders that can do this end up developing discipline and focus as they start, creating great habits. As you progress you can add contract size but the first few months are pivotal. Too many times do traders try to rush it and trade larger because they won a few trades only to give it back. When you stick to your business plan, you succeed. Today we received an email from a client discussing his recent trading and some insight that is valuable.
Learn more about E-Mini futures and how they can be used as a tool to day trade the markets. Most of our students learn to trade the S&P 500 E-Mini, Nasdaq and Dow Futures to begin.
Summer trading can be a grind at times but today there were some clean moves. I was able to clear about $1,000 on Russell 2000 futures on small lot trading. Contrary to popular belief, trading does require some work - That work involves sitting inside an AC cooled building, watching some screens and clicking buttons. For some, this is a hard task, however it is a great reward when you actually put in the work to do it.
Below are the screen shots of the entries and a chart. This was a valid trade being it was taken AFTER 1pm EST. Trade less, this is not a game of buy and sell over and over, the market trends and there is no rush. If you're making more than 5 trades a day then you've never been trained properly on how to trade markets, this is a fact.
Trading can be tricky at times. It's one thing to read a book or to trade in a simulation account and it's another actually doing it successfully. One of the items that is rarely discussed, at least in the educational space, is account management. Too many times retail investors trade too large for their account. During slow Summer months picking your spots is key. Most professionals understand the importance of trading well BEFORE summer arrives so when it slows you are still working with profits. The other idea is to take profits quicker and to trade smaller.
Last week we took trades on NFLX that netted just over $4,500 in a two day trade. The risk was about 50% of what it usually is and while the options traded to $8.00 a contract (we entered at $0.70-$0.90) we took most profits off at $4.00. Bad idea? Never. Making money is making money and in the Summer these moves are welcomed. Below is a screen shot from the trades.
Again, the real take away here is trading smaller and taking profits quicker, something you'll only understand if you've traded summer markets before!
See you at the next workshop!
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