Whether you are Spread Betting, trading CFD’s, or trading DMA Futures, you need an edge.
Trading is tough, and managing your emotions is one of the toughest things you will have to learn in order to make a success of trading for a living.
The human brain is wired up all wrong for trading, in fact.
By nature we will take a profit too early (GREED kicks in and we snaffle up the winnings on the table), whereas if a trade goes into the red we won’t get out. Instead we’ll start to cross our fingers and hope that it comes back. As the trade goes further into the red pride gets in the way even more, and we allow the situation to get even worse. We FEAR booking a loss, and seeing that loss crystallise on our account, so we sit tight even more (or even worse we add to the losing position), waiting for it to come back (actually HOPING it will come back), except it probably won’t.
“The first cut is the cheapest” is a phrase commonly used by Professional Traders. When I go into my professional clients’ trading rooms I see stickers on traders’ screens with phrases like “get out of bad trades” and “run the winners”.
To become a successful trader you need to rewire your brain almost, and teach yourself to have the DISCIPLINE to get out of bad trades early on, and run the good trades as long as possible.
How can you do this? By using the charts.
You can use Technical Analysis to:
- Trade in the direction of the trend.
- Look for buying or selling opportunities
- Set clear targets and stops, preferably with a decent risk/reward (ie put on trades knowing where you’re going to get out, and knowing that the possible loss will always be much less than the potential profit)
- Trade at the important technical levels, and not in “no mans land”.
All of this will help you to manage your emotions. Only the very best traders in the world can ELIMINATE emotion. Most of us will have to content ourselves with finding a way of REDUCING the emotional side of things in order to help us make better trading decisions.
If you’re a novice at trading and/or technical analysis you will need some help with this, and FuturesTechs can provide you with the levels to trade around, as well as offering market leading guidance and analysis on a daily basis.
Professional Traders have been using our service for years as an essential part of their daily routine.
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Have a good week,
The FuturesTechs Team