Good Day Traders! Almost any day where I get to spend time trading is a good day. What about the moments in the days? Sometimes they don't end up according to the good day plan. And once in a while we have to accept things not going the way we "planned."
A successful trader has to have contingency plans in place for things that will come up that might be outside of the trader’s control. What are your risk management methods, or your insurance, if the unwanted doesn't know it is unwanted?
1) Cover yourself! We train to never be naked in a trade. Since the market could spike up or down at any time (5-10% chaos theory) and easily bust an account, we train to always at least have the short side of your trade entered with a stop loss set for protection.
2) I.C.E. on Speed Dial. Have your broker on speed dial incase you are in a trade and lose power or internet, so that you can call and flatten the trade.Typically the Profit and Loss brackets are lost when you power or internet is lost. Please practice calling once when there isn’t an emergency to make sure that you have the correct phone # loaded!
3) DON’T panic! If you get into a trade and something isn’t correct, DON’T panic! Have a practiced EAP, or Emergency Action Plan, written out method of steps to take to rectify the problem. Don't get caught in a burning building without knowing the exit points and unlocked staircases.
4) Track Record! Building a track record in trading is more than simulators and statistics. Know your computer software well. These are the tools of your trade! If this is something that you will be doing for years to come, continue to learn the infrastructure of the devices you rely on to protect your assets.
5) Traders talk traders talk! Talk to other traders about their contingencies! Maybe join a group or network of traders. You can learn to trade many ways and from many sources. With the vast amount of information both available and not available to us, it is important to find interaction with other traders. Receiving guidance and support from traders that have been there and done that can help save you big $$$ at the end of the day.
One place to learn about managing the risks associated with trading is at FNL! Meet who is trading, what they are trading, how they trade, & find out why people would trade anything to be trading at FNL!
Remember to check out FNL at www.futuresnetworks.com
As always, it’s my pleasure to help traders make consistent money long term.