Master Trading Psychology
I wrote about this topic in part one here.
In this second part I have a 30 minute video that might help with trading.
This particular video has more to do with managing a portfolio of stocks & options but it applies across the board.
I’ll go over some full P&L on positions as well as context.
Most of you who read this are futures traders but there are some nuggets in this that will help if you are developing as a trader.
Introduction:
Scratch trades happen all the time. That is ok. Whether it’s futures or options. Many times I will test trades and scratch our or make a little. Get used to that. That never ends and that’s what this game is, at least in futures trading.
This happens a lot - especially in zones - so this idea that the trade you take HAS to work there and now is not real. I discuss this in part one.
Position Sizing:
Managing a position size is key and it’s a art, not a science, especially when it comes to futures trader. For example, if I’m trading a certain zone I may trade full size v. another smaller/quarter size.
I would say the new trader does not differentiate from this: each trade is the same size. When trading futures, specifically, I think most developing traders using 1-3 contracts at a time using a scaling method is ideal. But there are some takeaways if you’re a futures trader specifically in this.
In this video I talk about it in depth.
If you listen to part 15:00 - I talk about risk models and breaking risk. Whenever I am trading futures that rule never breaks. There are times even, where I am down on the day or month even and I might just trade small just to get some green back.
That same mindset I’ve taken into other asset classes which you’ll see in this video.
If you are an an multi-asset class trader and are interested in learning about equity options - this here is designed for smaller accounts.
If you are interested in that webinar mentioned at the end of that webinar you can find that in here.
Thanks for reading.
Dan
This article is presented for informational purposes only, is an opinion, and is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investments. Any such solicitation of an offer to purchase interest will be made by a definitive private placement memorandum or other offering documents.
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