I wish that you print this message out and keep beside you at all trading times. I also wish it could be printed out with 24K gold letters. It‘s that important.
Basically, there are only two ways to make money trading futures.
One is having enough capital in order to buy when the market is oversold, sell when it is overbought (all markets must return to neutral) or sell off seasonal highs and buy seasonal lows on a weekly chart. But a very few people have this kind of money that allows them the massive drawdowns that would occur until the market finally moved in their favor.
The other way is what we need to do.
I‘ll tell you straight. Buying or selling one contract here or there will NEVER make you successful.
To pick up $400 here or there is fine but in the long run you will lose more than you will make and commissions will eat you alive. $400 isn‘t good for much of anything. Within days you will just end up giving it back and be out the commissions besides.
If you want to make money in this business, if you want to make this A BUSINESS, then you must trade multiple contracts, period. I am talking two to ten, sometimes even 10+ lots. Making 400 bucks on a trade doesn‘t impress anyone. But if you have 5 times $400 that‘s two grand and with that kind of money you can do things.
But how can a short funded trader do this? Just save your money. Keep paper trading until you have 5 to 10 grand or more in your account and then trade the way you have been taught to trade. Wait until the right formation occurs whereas you have 3 times the profit potential as you would have at risk in SL placement. And then, go for it.
And if you lose then back off, save your money up again and try again. And again and again if necessary.
Yet you have read all this stuff about not risking more than a small percentage of your account in any one trade. Is this not true? Yes it is true, if you can afford to trade multiples without going over that darn %.
But we, the shortfunded traders are in a more desperate situation. We NEED to make money. If we will small, then all we are is small time traders. We win small and then the next thing you know is that we are giving it right back. That, and then some more on top of it. After all this then we pay commissions and wind up at the end of the month far in the red with a bad taste in our mouths.
Consider futures trading as playing a pocker game. Meaning, I take my $50 to a game and that $50 is what I am willing and prepared to lose. And if I lose that fifty bucks, I remain as happy as can be because I paid $50 for a night entertainment with my friends. If I win, fine. But I am prepared to lose and when I do, there‘s no way I would feel bad about it whatsoever.
Now if I enter that game knowing I can‘t afford to lose that fifty bucks because I need to buy gas on the way home, I will lose it for sure. But if that fifty dollar bill is *expendable*, then I find myself more often than not, sitting in the winner‘s chair.
Another thing I learned was this; when that $50 is gone, I leave the table. I don‘t dip into my wallet or my good-lady‘s purse for more money. That always makes me wind up not only a loser, but feeling bad inside, too.
Can you trade futures and be successful with a small, say 5K account? Yes. But you have to be better at it. Be more patient. Have a keener eye and feel for profit potential vs. risk than the guy with $50K. The less money you bring to the table the better player you must be.
I want all of you just to walk away. Go sit in another room. Take a break. And don‘t you dare consider making another real trade until you learn to be patient. You must force yourself away from the table unless the most beautiful trade jumps off the charts and smacks you in your pretty face. Until it does, save your money.
But Tom, you say. If I do this and the trade is a loser then I‘ll have little left… That‘s true. In that case, keep your hand in it papertrading until you can save up enough money to try again. Try and try again. And when the big one comes, it will make up for all you have lost. And if you get another big one, you will be way ahead.
Being stingy with your money, waiting fot the RIGHT trade is something you must do. I can‘t do it for you.
In my TDE I show you my real trades as examples that my methods could be applied to. Most cases should not be traded by you the shortfunded novice. If I sent out an email each time of markets that you should/could indeed trade, there would go days and days between emails.
I am simply trying to show you what to watch for. Things that meet my criteria. But I cannot say „Hey, this is THE ONE! This one or that one needs 3 or 4 or 10 contracts on, okay?!“ Why? Because you will trade it with real money and if it turns out a loser you‘ll tell everyone in the world what a lousy person I am.
I will not be responsible for your profits or losses. I will show you how I do my things in the real world and that‘s where it ends.
I am trying to educate you in such a fashion that YOU can make the decision yourself. It is after all YOUR money and I have no right or obligation to be messing with it.
The strategies I have laid before you are what I do trade. Nothing more, nothing less. The thing that will make the difference between you succeeding or failing is something I cannot give you… PATIENCE.
And if you do this and you still fail one time, two times, three times, NEVER EVER feel bad about it. Make it the 50 lousy bucks we carry to the poker game. You can succeed at this if you hold in clenched fist the words of this article.
To give you the clearest explanation of what I am trying to say, I will use myself as an example. When I make money on a trade or lose money on a trade, nobody around me even knows. I think about it for just a few minutes. „Hey, I picked up 3 grand in java tonight. Good on me. Oops, lost $600 in corn today, turning silly on me. What a heck!“
But that‘s the end of it. The wins and losses have about the same emotion with me. Why? Because tomorrow is another day. And if something in the charts sign to me, I will dance its song. If not, I won‘t. No big deal. Tomorrow‘s another day.
But I‘m telling you… if you continue to do one contract here and one there, you‘ll never come out a winner. The odds are stacked against you. But if you learn patience and wait, wait, wait, and then attack like the starving hawk, you will stand a much better chance at having the fat account you have always wanted.
Trust me. Been there long enough.