Saturday, October 01, 2005
Special entry... how to make a small fortune in futures
Today's weekend special is how to make a small fortune in the futures market. It is really easy... just start with a large one.
Yes, we've all heard that one before. Not only have I heard it but I've actually tried it. Let me tell you, it works. Guaranteed!
I was reviewing my trades one day and I noticed something.. in fact, I noticed when my worst trades took place. They took place right after I had a losing trade.
You see, after a losing trade I would have a tendency to get pissed off and go into revenge trading mode. I'm sure I've talked about that before in this blog. In fact I know I have. I've read it.
You see after several good trades, all it takes is one losing trade and that is it. I lose it. The first thing I think about is making it back.... and now! I mean right now in the next 2 minutes. What is the logical way to do this.... go from 1 contract to 5 and then bet against the trend (more often than not that's what caused the first losing trade in the first place you see.....) There doesn't even really need to be a decent entry point.. any will do. All I want is only 1-2 points. That's all I need to get back to breakeven or even more $... Oh boy, wouldn't that be nice. More money.
OK, back the first 5 contract bet (that's what it really is since the odds are against me from the start). Once the chips are placed and the trade starts going against me I will add another 5 just because the market can't possibly go any more. It won't go through the next support level. It's already blown through where I would have normally put my stop loss right? About that same place where I usually get stop out and then the market reverses so I will add another 5 on because the market is going to turn. It has to. Right?
No.
It doesn't. In fact I can guarantee that it doesn't have to turn... not until I add another 10 contracts on for a total of about 20 contracts.
Yes, 20 contracts because when this baby turns I will make it back in only 1/2 the time! Oh yeah, I mean real money. Forget about just breaking even! Hell with chump change. I'm talking real money now. Oh yeah baby... real money. Baby needs a new pair of shoes! Red velvet at that!
Ok, so it is bouncing off the next support level, but it will turn right about now. I mean it can't possibly go through this one like the last 2 could it. I'm tempted to add another 10 contracts on but I hesitate only because another 20 would even be better... Yes you heard me.
Another 20. That way I can make it all back and more with only a 25% retracement. Right. If it goes to a 50% retracement then I will make it all back and blow my weekly goal out of sight. I can just sit on my back deck and just surfing the net and playing Xbox all week long since I will have hit my weekly goal, right?
Of course I will. I can see it now. Until....
It goes through the last support and starts falling like a waterfall....... Falling.... falling....falling.
I can't take it. I just lost a months worth of profits on one trade and I'm not a total moron... just 1/2 of a moron. I pull the plug. I get out. I am now flat.
Ha! The market is still falling. I did the right thing! I can't believe it! I actually didn't sell at the bottom. That is until....
The market turns.
Just like I thought it would.
I could have been rich... if I had only held on a little longer.
Damn it! I could have been rich.
OK, I'm buying another 5 now that it has turned around. Yes, 5 more! It's finally turning my way. Oh yeah baby, my way.
Then it turns down again..... it can't do this. I will add another 10, not wait, 20 will make it back faster....................................................
Don't believe it can happen. Believe it.
Trader X
Yes, we've all heard that one before. Not only have I heard it but I've actually tried it. Let me tell you, it works. Guaranteed!
I was reviewing my trades one day and I noticed something.. in fact, I noticed when my worst trades took place. They took place right after I had a losing trade.
You see, after a losing trade I would have a tendency to get pissed off and go into revenge trading mode. I'm sure I've talked about that before in this blog. In fact I know I have. I've read it.
You see after several good trades, all it takes is one losing trade and that is it. I lose it. The first thing I think about is making it back.... and now! I mean right now in the next 2 minutes. What is the logical way to do this.... go from 1 contract to 5 and then bet against the trend (more often than not that's what caused the first losing trade in the first place you see.....) There doesn't even really need to be a decent entry point.. any will do. All I want is only 1-2 points. That's all I need to get back to breakeven or even more $... Oh boy, wouldn't that be nice. More money.
OK, back the first 5 contract bet (that's what it really is since the odds are against me from the start). Once the chips are placed and the trade starts going against me I will add another 5 just because the market can't possibly go any more. It won't go through the next support level. It's already blown through where I would have normally put my stop loss right? About that same place where I usually get stop out and then the market reverses so I will add another 5 on because the market is going to turn. It has to. Right?
No.
It doesn't. In fact I can guarantee that it doesn't have to turn... not until I add another 10 contracts on for a total of about 20 contracts.
Yes, 20 contracts because when this baby turns I will make it back in only 1/2 the time! Oh yeah, I mean real money. Forget about just breaking even! Hell with chump change. I'm talking real money now. Oh yeah baby... real money. Baby needs a new pair of shoes! Red velvet at that!
Ok, so it is bouncing off the next support level, but it will turn right about now. I mean it can't possibly go through this one like the last 2 could it. I'm tempted to add another 10 contracts on but I hesitate only because another 20 would even be better... Yes you heard me.
Another 20. That way I can make it all back and more with only a 25% retracement. Right. If it goes to a 50% retracement then I will make it all back and blow my weekly goal out of sight. I can just sit on my back deck and just surfing the net and playing Xbox all week long since I will have hit my weekly goal, right?
Of course I will. I can see it now. Until....
It goes through the last support and starts falling like a waterfall....... Falling.... falling....falling.
I can't take it. I just lost a months worth of profits on one trade and I'm not a total moron... just 1/2 of a moron. I pull the plug. I get out. I am now flat.
Ha! The market is still falling. I did the right thing! I can't believe it! I actually didn't sell at the bottom. That is until....
The market turns.
Just like I thought it would.
I could have been rich... if I had only held on a little longer.
Damn it! I could have been rich.
OK, I'm buying another 5 now that it has turned around. Yes, 5 more! It's finally turning my way. Oh yeah baby, my way.
Then it turns down again..... it can't do this. I will add another 10, not wait, 20 will make it back faster....................................................
Don't believe it can happen. Believe it.
Trader X
