Custom Search

Professionals Win, the Public Loses

It's that simple, that direct, and that predictable. It's like playing poker with a table full of professionals; the beginner will most likely provide grist for the mill. If you want to play the game with professionals, you will need to act, think, and trade like a professional. The bad news is that it's hard to do, but the good news is that it can be learned.

Do you Have Protection against Bad Price Fills?

The good news is that there are rules that will work for you on occasion. The bad news is that most of the time the rules don't work in favor of the public. Furthermore, the regulatory agencies that supervise futures trading will rarely be of assistance to you, since they are most often more concerned with making examples out of people with high visibility than they are in going after the insidious crooks.

Therefore, if you have a problem with an order fill, with a broker, or with an exchange, don't wait for help from the regulatory agencies; take matters into your own hands and complain directly to the firm's management or to the exchange itself. While it may be difficult for some traders to be forceful when they've been wronged, the fact is that the squeaky wheel gets the grease.

Misinformation and Disinformation Run Rampant

The computer age has made it even simpler for savvy operators to fool the public by creating seemingly perfect trading systems. The systems appear to be very good on paper but in reality are optimized to show the best-possible back-test scenario. In reality they have very little probability of going forward successfully in real time. Let the buyer beware. The good news is that systems are plentiful; the bad news is that most of them don't work.

Traders Love S&P Trading, but Most Traders Lose in S&P

Why? The reasons here are simple indeed. First, most traders don't want to hold S&P overnight because the margin is too high. Hence, they day trade S&P. What makes their S&P trading a losing proposition is the fact that traders use very small stop losses in this market. My work suggests that even a 500-point ($1250) stop loss in S&P is, at times, insufficient. When a market trades in an average range of 600 points daily, a 500-point stop loss is needed to take the daily range into consideration. The good news is that S&P futures offer great trading opportunities, particularly for day trading. The bad news is that a large stop is required and the odds of being stopped out, unless you use a wide stop, are very high.