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Six Steps to Better Trading


1. Focus on markets, trading vehicles (i.e., equities, futures, options, spreads), strategies, and time frames that are comfortable for you and that suit your personality. The trades you make have to be “yours,” not mine or those of anyone else. Even when you purchase a method or system, it is vital that you study that method or system to the point that you thoroughly digest and understand the rules. That way you make it your own.

2. Identify non-random price behavior, while recognizing that markets are random most of the time. Look for repetitive price patterns and setups, but realize that once you begin trading them, they may become short-lived. If or when they stop working, be patient. Most of the time they will begin working again. When we released Andy's E-mini bar, it stopped working for awhile, but those who stuck with it send us glowing letters telling us they are satisfied with the results. When you have a provable method, give it a chance to work. When you see an overall one-year equity curve showing that the method earned $7,400 trading one contract at a $10 commission, work your way up to a 10 lot and you will be making in excess of $70,000/year. Then collect more than one method or setup so you can make considerably more.

3. Absolutely convince yourself that what you have found is statistically valid and tradable in the way you like to trade. Not all statistically valid situations will be comfortable for you, nor will they fit your management style.

4. Set up trading rules; but remember, rules may have to change.

5. Follow the rules, but never to the point of destruction. You created the rule. If it stops working, change the rule, or throw it out entirely.

6. Learn to trade for fewer ticks but with more contracts. Most people do it exactly the opposite way.

The bottom line: personalize your trading to yourself (independence); and do the right thing consistently (discipline).
Joe, I would be interested to know the rational behind rule 6. I guess that it depends on method but I find logical what you advise against. stb
Joe, are you still in business, I don't get your newsletters anymore.
6. Learn to trade for fewer ticks but with more contracts.

I have had this argument with several traders in the past. The summation of this statement is that the only real difference between a $500/day trader and a $5000/day trader is volume. If you have a strategy that you feel confident will net you $500/day with some degree of consistency, then the next step for you is to add the number of contracts you trade - using the exact same set-ups.

If you are making $300/day with 1 lot trades. Try 3 lots and you should be able to push your daily profit to the $1000/day range. Once you do that for several sessions go up to 5 contracts.... before you know it you'll be trading 100 cars!!!

disclaimer: The most I ever got up to was 10 lots with YM, 6 lots with ZC and 5 lots with ZN. When you add volume you are risking a lot more and your emotions will drastically change - even though you are confident with your system.
Thanks for the post Joe. Very educational and intriguing. I am new here in the forum and am wondering how I can get Andy's E-mini bar that you just spoke about.
Thanks again and I appreciate your help.

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