Archive for September, 2010

Ten Rules for E-mini Day Trader Longevity


This list is for traders but also applies to investors.

1. Recognize mental blocks. If you believe that the financial markets are rigged, stay away. Bias is blinding. If your ego requires constant feeding and vindication, do not trade. If being right is more important than making money, steer clear of the stock market. If you must be dogmatic, direct your energy into following these rules.

2. There is no needle in the haystack. There’s no reliable way of picking a single winner from the thousands of stocks listed on the exchanges.

3. Resist betting it all on the longshot because the outcome is based purely on luck. Dr. Ziemba explains the mathematics of horse racing. The point is that the bettor is better off with horses that finish the race “in the money”. They don’t have to come in first.

4. Diversify. Spread your bets around. It’s the only way to be on board the winner.

5. Trade small. Bet only a small fraction of your equity on each position. You must take risk to get reward, but ruin is certain if you take insane risk. It’s defined in Fortune’s Formula. Think Adventures in Conditional Probability.

6. Press the winners. You must compound a winning streak.

7. Never throw in good money after bad. Never double down. Ever.

8. Do not rationalize. Down is NOT up. Red is NOT the new black. If the account equity is shrinking, your bets are in the wrong direction.

9. Establish a stop loss. Place it in the appropriate location (except just above the swing high or under the swing low where everyone else put theirs), a place where you can be statistically confident that the move in the present direction is over. Don’t use a tight stop for lack of equity. The market doesn’t care about how much is in your account, so trade a smaller position size and put the stop in the proper place.

10. Use the stop loss. Just do it. Immediately. No excuses. Having a “mental” stop loss is the same as lying. There’s no point, because the longer you let it slide, the deeper the doo-doo.

*Observe Rule Nine. Always. Don’t go to the bathroom without it.


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    My E-mini Trading Stops Strategy

    Many traders have their own theory on how to place stops on their e-mini market orders, or whatever kind of order they place. Frankly, I insist that e-mini day traders place their stops in a manner that gives them adequate protection. My stop ranges are anywhere from 12 to 20 ticks, depending upon the nature of the market that day.

    But I want to address those who day trade without stops and indicate what a terrible risk they are taking because a sudden spike could signal the end of your e-mini day trading career. Stops are an important and essential part of any e-mini trading strategy to keep from encountering catastrophic losses.

    I also move my stops when a trade is in progross….let’s assume that I have made a good trade and am in the money and I have initially positioned my stop at 12 ticks…once I am 1.5 points into the money, I manually move my stop up to 4 ticks…once I have reached two points, my stops are at my market entry points, and if I let the trade run I continue moving my stops upward to protect my gain. Remember this…..NEVER LET A WINNING TRADE BECOME A LOSING TRADE…and stops are a great way to do this.

    You may choose to use a trailing stop strategy, where once you reach a certain point in profit the stop moves automatically according to a preset you put in before the trade gooes in. I prefer moving my stops manually, which may be the remnant of the “old school” way of doing things, but I feel much more comfortable placing my stops this way.


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      Using Oscillators in E-mini Day Trading

      I’ve been getting quite a few phone calls lately from individuals asking me about my style of e-mini day trading….

      For some, anyway, the way I trade (and many others like me) seems too intuitive, though nothing could be farther from the truth. I do run a number of oscillators on my screens to cross check my fractal formations, and try to filter simple market noise out of the equation. There are some days, and parts of some days, where the e-mini market just wanders aimlessly and there few opportunities to trade. But I would hate to trade a “mechanical” oscillator system where my entries and exits are predefined because there too many anomalies for an oscillator to differentiate. Which is not to say that oscillators are of no use in day trading, only that relying on any mechanical or mathematical system to trade is a less than profitable situation.

      Fractals, or price action, gives a very clear picture of what the e-mini market is doing. Add support and resistance, pivot points and some filtering oscillators and you have a remarkable system to trade, all it takes is some practice and it can be easily mastered.


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        Chaos Theory, Fractals and E-mini Day Trading

        It is fitting that chaos theory got its start in the humble, but frustrating, field of meteorology. Why does it seem impossible for all our hot-shot meteorologists, armed as they are with ever more efficient computers and ever greater masses of data, to predict the weather?

        Two decades ago, Edward Lorenz, a meteorologist at MIT stumbled onto chaos theory by making the discovery that ever so tiny changes in climate could bring about enormous and volatile changes in weather. Calling it the Butterfly Effect, he pointed out that if a butterfly flapped its wings in Brazil, it could well produce a tornado in Texas.

        Since then, the discovery that small, unpredictable causes could have dramatic and turbulent effects has been expanded into other, seemingly unconnected, realms of science.

        The conclusion, for the weather and for many other aspects of the world, is that the weather, in principle, cannot be predicted successfully, no matter how much data is accumulated for our computers. This is not really “chaos” since the Butterfly Effect does have its own causal patterns, albeit very complex. (Many of these causal patterns follow what is known as “Feigenbaum’s Number.”)

        But even if these patterns become known, who in the world can predict the arrival of a flapping butterfly?

        The e-mini stock markets are said to be nonlinear, dynamic systems. Chaos theory is the mathematics of studying such nonlinear, dynamic systems. Does this mean that chaoticians can predict when e-mini stocks will rise and fall? Not quite; however, chaoticians have determined that the market prices are highly random, but with a trend. The stock market is accepted as a self-similar system in the sense that the individual parts are related to the whole. Another self-similar system in the area of mathematics are fractals. Could the e-mini stock market be associated with a fractal? Why not? In the market price action, if one looks at the market monthly, weekly, daily, and intra day bar charts, the structure has a similar appearance. However, just like a fractal, the stock market has sensitive dependence on initial conditions. This factor is what makes dynamic market systems so difficult to predict. Because we cannot accurately describe the current situation with the detail necessary, we cannot accurately predict the state of the system at a future time. Stock market success can be predicted by chaoticians.

        Manus J. Donahue III
        An Introduction to Chaos Theory and Fractal Geometry

        The upshot of chaos theory is not that the real world is chaotic or in principle unpredictable or undetermined, but that in practice much of it is unpredictable. And in particular that mathematical tools such as the calculus, which assumes smooth surfaces and infinitesimally small steps, is deeply flawed in dealing with much of the real world. (Thus, Benoit Mandelbroit’s “fractals” indicate that smooth curves are inappropriate and misleading for modeling coastlines or geographic surfaces.)

        Chaos theory is even more challenging when applied to human events such as the workings of the stock market. Here the chaos theorists have directly challenged orthodox neoclassical theory of the stock market, which assumes that the expectations of the market are “rational,” that is, are omniscient about the future. If all stock or commodity market prices perfectly discount and incorporate perfect knowledge of the future, then the patterns of stock market prices must be purely accidental, meaningless, and random (“random walk”), since all the underlying basic knowledge is already known and incorporated into the price.

        The absurdity of believing that the market is omniscient about the future, or that it has perfect knowledge of all “probability distributions” of the future, is matched by the equal folly of assuming that all happenings on the real stock market are “random,” that is, that no one stock price is related to any other price, past or future. And yet a crucial fact of human history is that all historical events are interconnected, that cause and effect patterns permeate human events, that very little is homogeneous, and that nothing is random.

        With their enormous prestige, the chaos theorists have done important work in denouncing these assumptions, and in rebuking any attempt to abstract statistically from the actual concrete events of the real world. Thus, the chaos theorists are opposed to the common statistical technique of “smoothing out” the data by taking twelve-month moving averages of monthly data-whether of prices, production, or employment. In attempting to eliminate jagged “random elements” and separate them out from alleged underlying patterns, orthodox statisticians have been unwittingly getting rid of the very real-world data that need to be examined.


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          How to Make (and keep) Money E-mini Day Trading

          As you continue to learn the e-mini day trading system I am outlining you will begin to realize that making money, at least in the pure sense, is not so terribly difficult. I have a few basic rules to follow, a little common sense, some chart reading and before long you should be able to make money e-mini day trading from home.

          But there is a little problem:

          AFTER SEVERAL MONTHS OF MAKING MONEY CONSISTENTLY,
          MOST PEOPLE END UP REVERSING COURSE AND LOSE ALL OF THEIR MONEY.

          The fact of the matter is that there is nothing more intoxicating than cold hard cash. Time and time again I have watched successful e-mini day traders earn money and then fall flat on their faces because they could not manage the psychological aspects of making money and managing risk. Martin Pring has written an excellent book about investment psychology, and goes to great length to explain that most investors are very able to trade effectively. However, the problem with most e-mini day traders lies in the intoxicating effects of earning money trading.

          Typically, investors begin to take on too much risk, or make e-mini trades that fall outside the parameters of our discussion here, or tackle markets that our principles do not apply to. What I am trying to say is quite simple, really….the psychological aspect and the control of your own greed is, by far, the most challenging aspect of trading. Over trading, taking on too much risk by trading to many contracts, entering marginal trades, developing emotional attachments to trades…these are all the sign of impending disaster and I cannot stress enough that the psychological aspect in managing your e-mini day trading life is far more challenging than the technical aspect of trading.

          I know, I know…I can hear you all muttering….”that may be true of the other guy, but I am a very disciplined individual and this will never happen to me……”

          It will happen to you, but how you learn to deal with the intoxicating effects of your cash earnings from e-mini trading will determine how well you succeed in the business. I can teach anyone to make the right day trades, but I can’t get most people to make the right trades at the right times. There are no patterns in the markets, there are only spurts of momentum, or directional movement….and no matter how sure you are that something MUST happen, it probably won’t. I think it’s a Murphy’s law thing..or at least it seems to be.

          Your ability to act in a completely rational manner and consistenly execute trades day in and day out will determine how successful you will be. I cannot harp on this topic enough…and I do, believe me. Investment psychology is the demise of 7 out of 10 e-mini day traders. Don’t be one of the seven that fail, be one of the three that succeed.


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            How to Exit an E-mini Day Trade Using Stochastic Indicators

            I use a portion of the stochastic formula to exit my e-mini day trades and, for the time being, I thought I would introduce you to the concepts and premises of stochastic measurement.

            Stochastic is an oscillator that is very popular and has been around for several decades. It is a price oscillator tracking overbought and oversold conditions. It is often used in the red/green light trading systems which can cause problems for e-mini day traders unless they understand how stochastic works, why it was created, and what it was designed specifically to track.

            Stochastic was written by George Lane and is a true oscillator which means it was primarily designed to track either overbought or oversold price conditions in a range.

            In the e-mini stock market, the term “overbought” means that it can be assumed everyone who wanted to buy the stock is now fully vested and there are no more buyers or insufficient buyers to move the stock up.

            Oversold is just the opposite, there are insufficient sellers to move the stock down.

            The reason oversold and overbought is critical in sideways markets is that the shift from buying to selling can happen rather quickly.

            George Lane wrote the indicator Stochastic formula based upon the presumption that as a run moves up (or down) a stock will close nearer to its high as buyers keep rushing in to buy the stock. But as momentum tapers off or buyers become scarce, then a stock will close lower from the high price for the day.

            This is a presumptive statement that works in trading range markets. The theory fails during strong rallies and velocity markets because stochastic will move into the overbought area or oversold area signaling an exit just as the stock begins a huge run.

            Therefore, Stochastic should not be used during momentum or velocity markets, platform markets, or bottoming markets as it will create a premature exit signal just as the stock is about to run up strongly.

            During a velocity market you should use a different indicator than stochastic. Instead switch to an accumulation indicator and quality indicators as these will help you get into the stock early before the big moves up.

            The Stochastic Formula and what it is intended to reveal:

            There are 2 lines for the George Lane stochastic formula: %K and %D usually represented in red and black lines on charting software. First, the K line must be calculated.

            K=100((C-L)/(H-L))

            Where K+ the location of price relative to the current price range

            C= the last close price

            L=the n-period low price

            H=the n-period high price

            n=any time period specified

            K is smoothed twice with a 3-period SMA which creates the %K line, usually black on charts.

            Then %K is smoothed again with a 3-period SMA to create %D line which is usually red on charts. Only the %K and %D lines are used in the chart analysis. So you will only see 2 lines to represent the 3 lines in the formula. Because it uses a fixed time period to period calculation, the lines can jump and move erratically if price fluctuates significantly.

            Most stochastic indicators have predefined 80% overbought line and 20% oversold line on the chart. A few charting software programs allow you to move the lines to whatever percentage you wish.

            If you are a beginner, simply use the settings of 80% and 20% for a trading range market.


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              Linear vs. Non-linear Charting Systems and Pivot Points

              Pivot points in e-mini day trading are, to some, the holy grail of investing. Generally speaking pivots are calculated in the following manner:

              R2 = P + (H – L) = P + (R1 – S1)
              R1 = (P x 2) – L
              P = (H + L + C) / 3
              S1 = (P x 2) – H
              S2 = P – (H – L) = P – (R1 – S1)

              Where….”S” represents the support levels, “R” the resistance levels and “P” the pivot point. High, low and close are represented by the “H”, “L” and “C” respectively. Note that the high, low and close in 24-hour markets (such as forex) are often calculated using New York closing time (4pm EST) on a 24-hour cycle. Limited markets (such as the NYSE) simply use the high, low and close from the day’s standard trading hours.

              As for my own opinion, I find pivot points of great value on certain days, and of zero value on others. So, if you are going to be a pivot point man or woman, you will need to develop a methodology for determining the accuracy of your own pivot point system.

              As for me, I generally chart the pivot points each day, and see what relevance they may have to my own trading techniques.

              Closely related to pivots are support and resistance, and this is where the rubber meets the road for me. As many of you are aware, I base most of my trading on chaos theory, which is to say that there are patterns within patterns, but the frequency of these patterns within patterns is random. Ah, that certainly is a mouthful and I am sure that many of you are shaking your heads and wondering what I am actually saying. To put it quite simply, I believe trying to apply linear charting systems to a non-linear market is futile. There is nothing, absolutely nothing, static about the method in which the market trades.

              I am sure the random walkers are standing and applauding at this point, but you can all sit down. Of course, the standard argument would sound something like this, at least from the Random Walk Cabal….”those equity bubbles are anomalies that occur from time to time…” But if they were aberrations, every member of the risk arbitrage community would have resolved those market inconsistencies within hours. No these bubbles, or masses of mispriced assets suggest that random walking in a fine theory, but nearly useless in actual practice. The creation of bubbles in the e-mini market has occurred in a variety of conditions and markets for more than 400 years. Whether it has been tulips, or gold, or Internet stocks, we tend to overbuy and oversell, usually against all logic.

              However, support and resistance are of great importance to me…but it is important to remember that support is not static either, and is constantly morphing into new support and resistance levels as the days progresses. What? Yes, I know that most day traders strike a line here and a line there and establish there support and resistance based upon those initial highs and lows. Some then apply Fibbonacci retracements to further establish support and resistance. Ah…erm…well….Fibonacci analysis is certainly interesting at some level, but the actual levels of correlation, proven by hundreds of scientific studies, is sketchy at best especially when charting price reversals. Since many of the numbers in the Fibonacci sequence are quite close together, it isn’t hard to point out that the market turned just past a 50% retracement, or just short of a 61.8 retracement….but the fact of the matter remains that super accurate predictions with Fibbonacci numbers is not as accurate as some practitioners would have you believe.

              At once point in my career I drew in dynamic support and resistance lines as I traded, but I have found that a program called Decision Bar does an excellent job of pin pointing the ever changing support and resistance lines and have learned to rely on it’s accuracy and save myself a wealth of time and effort.

              So, for today….I have tried to point out the problems of charting non-linear systems with linear charting tools, and suggest that non linear charting systems can greatly enhance your e-mini day trading success.

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              Pivot Points in E-mini Day Trading

              Pivot points are areas to be aware of and respect. They are both dangerous and positions of opportunity.

              Knowing those points can help an e-mini day trader to identify potential entry points and/or stop loss levelsst of the trading during any given day is done by market makers and specialists. Markets, no matter in what they deal, exist to facilitate trade and prices continually fluctuate between supply and demand to enhance the exchange process.

              The market cannot exist in a state of paralysis so traders will constantly adjust bid and ask prices to keep the exchange going. This process is a combination of a traditional auction to seek top prices and a Dutch auction to explore price bottoms.

              Prices continually rotate enhancing trading. Therefore, prices of perceived value (support) and perceived over valuation (resistance) can be recognized by the volume of activity at different price levels.

              Prices are moving up and as soon as they hit some imaginary resistance line they turn around and start falling until they hit the level of support.

              Pivot Points are those price levels that are most likely to act as levels of support and resistance on any given trading day and you can calculate them with the following formula:

              H = Previous Day’s High
              L = Previous Day’s Low
              C = Previous Day’s Close
              Pivot Point PP = (H + L + C)/3
              First Area of Resistance = R1 = 2PP – L
              First Area of Support = S1 = 2PP – H
              Second Area of Resistance = R2 = PP + H – L
              Second Area of Support = S2 = PP – H + L

              When the prices move through any known pivot points (PP, S1, S2, R1, R2) on increased volume, they are most likely to continue the current trend, and if the prices hit the known pivot point but are unable to move through, then they are most likely to reverse the current trend.


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                A Fractal View on E-mini Day Trading Prognostications

                On a given day it possible to read any number of current predictions, analyst recommendations on just where the futures and stock markets are headed. To be sure, you can usually find an analyst predicting an oncoming upward move in the market, and look somewhere else and find another analyst who predicts impending disaster. This is the nature of the financial business, and for most of my life I have had many good chuckles at the ranting and raving of this group of financial gurus.

                I think it would be expedient to point out at this point, that market predictions, including the futures markets, are essentially predictions with a binary outcome. The futures market either goes up or the futures market goes down. Since the market rarely stays exactly the same, we will rule out this outcome as spurious. From the onset then, futures market prognosticators have a 50% potential to be right.

                Nearly every market establishes some “hot” market gurus, whether it’s Robert Prechter, Granville, Gazarelli….they all have their fifteen minutes of fame and then fall into discredit when they fail to maintain the accurate predictions that catapult them into fame.

                And I read many of the analysts every day, more for entertainment than anything else. Why? I think it helps to understand what is going on and the wide variety of interpretations of current financial events. Do I give the analyst any weight in my trading? Absolutely none.

                I am a scalper, which means I am only interested in small movements in my futures trading style. I don’t care if the market is moving up or down, or even sideways. All I am interested in is entries into the market that can earn me a potential of at least two points, whether that is a short or long position is irrelevant to me. I am, in essence, a bottom feeder who waits for the crumbs to fall.

                That being said, I also am a chaos theory believer. I have observed market predictions over and over fall to the side of the road….whether the predictor is a fundamentalist or technical trader. Quite simply, the market doesn’t listen to what people say…it is a psychological beast that acts, at time, as irrational as any human being you might imagine. You will hear all kinds of predictions today about this being a “dead cat bounce” and other claiming the worst is behind us, and still others predicting dire times…who is right? I have no idea, and neither do the predictors. As I have mentioned, since the outcome of any prediction is binary in nature, about half will be right and about half will be wrong. I find it odd, as much of my college and graduate degree course was in physics that we understand many of the intricacies of the atom, and how quantum mechanics works (which is truly one of the truly bizarre discoveries of our time)….but no one has found a working system in predicting the market, despite the fact that we have poured an inordinate amount of money and time into trying to understand the market.

                I realize that my view is an unpopular one, and the screaming idiots who now enjoy tremendous popularity on market predictions (on MSNBC) would call me a heretic, but the overwhelming amount of scientific study, academic study, points to the absolute accuracy of chaos and fractal theory as the only valid trading viewpoint.


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                  Some E-mini Day Trading Rules . . .


                  I am a scalper, so I am not terribly interested in long term trends, Elliot Wave theory or any e-mini day trading technique that requires me to think ahead much more than one half day. That is to say that I am trying to carve out 2 pts. or more out of intraday  directional movement. I truly believe that the e-mini market is random, so when I use the word “trend” I am not using in the sense that a technical trader would. The truth is, I use the “trend” for lack of a better word to describe intraday directional movement.
                  Since the market moves in many random ways, my day trading method only seeks to take advantage of a tendency for people “hop on the bandwagon”. People will generally watch the market and jump into a trade when they see it heading one way or the other, and they generally stay in the trade too long. People tend develop strong emotional ties to a trade they make. They get into the mindset that the market “ought” to do something based upon some information they have gleaned, or some event that has occurred or is occurring. From the onset, let me say that the market does not “have” to do anything and freeing yourself from this mindset will greatly improve your e-mini day trading. The markets are not rational, and you will drive yourself crazy trying to rationalize the movement you see unfolding on your chart.
                  Since I believe that the market moves randomly via fractals, or fractal movement, I do not believe that identifiable patterns form. This always gets my technically oriented friends in a ruffle, and I am often cursed for this belief. An overwhelming amount of evidence has been collected by academics to prove that the market is random that it is difficult for me to fathom that some people trade with chart patterns. By chart patterns I am talking about the species of technical formations typified by “head and shoulders patterns, pennants, double tops, double bottoms, etc” In short, I do not use any chart patterns in my day trading.
                  On the other end of the spectrum, I do not have any use for fundamental trading either. For scalping, it should be self evident that we do not use fundamental principles. If they actually worked, most fundamentals take at an intermediate period of time to develop. My trades are anywhere from 1 minute to 30 minutes….I have been in very few e-mini trades longer than thirty minutes. But I’ll go a step further on this topic and offend all the disciples of Ben Graham and Modern Portfolio Theory….I think it’s about as valid to use as chart formations. Note to self: Is the screaming and yelling I am hearing from the back of the room? Are they throwing things at me yet?
                  My thesis for rejecting Modern Portfolio Theory is really simple: just because a company is well run, has products of high quality, and a healthy cash flow does not mean that the stock price will go up… There was a company that was doing everything right but the stock price stayed pegged at around $20 for years, and there are countless examples of this being true. So I don’t use P/E ratios, beta coefficients, alpha coefficients and all the other investment terms that go hand in hand with this style of investing.
                  No, what I like are little spurts of unpredictable momentum. Other than fractal theory, there is no viable explanation for the gentle (and sometimes violent) rocking pattern that is part of every chart. Of course, the problem has always been ascertaining when these little bursts of momentum take place. How can you time your entry and exit points to take advantage of rocking (or swaying) that is on every chart? How do you know which sway is going to be 5 pts and which one will be a sideways move?
                  I have taken the liberty of drawing a dark line so you can see the swaying action in the market, and you will notice that some market moves are very short and some are very long. How do we get into the market for the long moves, and stay out of the short moves?
                  So…..now that I have offended every modern day investment theory out there…lets talk some about what I DO…INSTEAD OF DWELLING ON WHAT I DON’T DO.
                  There are many things I keep in mind when I day trade, but I have 4 rules that I never deviate from. Some of these rules were hammered into my head by my mentor nearly 20 years ago, others were learned the hard way- through experience.
                  1. Never e-mini day trade without stops in place. I can’t imagine a day trader trading without a stop order in place, and am amazed when I talk with other traders at how many trade without placing stops. I suppose you might try to justify trading without stops by saying that you are sitting right there at the computer and will be able to trade out of any position before you can get in trouble. This is not true….without stops you have no way to account for the lightening fast moves that can come about from catastrophic news…The ES contract moved 71 pts in one 1 minute bar after one of the last rate cut announcements. Granted, you can have a move gap through one of your stops, but this is so rare as to have only happened to me once. Even on the 71 point move I was able to exit with a stop executed. Without stops you are taking excessive risk. Also, the stop is also a mental stop. As I have said, traders can become emotionally attached to their positions and the stop serves to remind them that they are getting out of the market whether they like it or not.
                  2. Never let a winning e-mini trade become a losing e-mini trade…this is one of the most difficult things to learn. When do you pull the trigger to exit? Of course, there are many oscillators that can give you a pretty good idea when the trade is over….but I have watched trader after trader get 3 points up and become convinced that market is going through the roof. It seldom does, and what generally happens is the trader rides the trade right back down to breakeven or a losing position. We will talk at length about how to avoid this….but exit strategy is seldom easy. And for those of you wondering, I can’t stand trailing stops.
                  3. Avoid e-mini day trading against the trend…but if you must, cut the number of contracts you normally trade in half. I chant “the
                  trend is my friend” twenty times before going to bed every night. And I still make bad trades, almost always against the trend. How do you know what the intermediate and short term trends are? I make it easy, I chart an 89 period Simple Moving Average and when the price is above the moving average I concentrate on long trades, and conversely, when it is below the 89 period average I concentrate on short trades…this silly little rule will save you money.
                  4. Be on the right side of the e-mini trade…have you ever done this? You have considered a trade carefully after watching it set up exactly the way you dream of. Everything is perfect, except the trade skitters sharply the wrong way when you execute. Most traders will watch the price crash into their stops and chalk it up to experience. You don’t have to be stopped out on every losing trade. If the darn thing looks like a dog out of the gate, and your oscillators even confirm this, get out….I’ll say it again, you don’t have to ride every e-mini trade into your stops. It takes a tremendous amount of ego reduction to do this….you have to admit to yourself that you were dead wrong from the onset and take a smaller loss than hitting your stops. It not as easy as it sounds.


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