If you’ve spent anytime trading the index futures financial markets, you understand how volatile these markets can be. Many new emini traders very often will start out with limited amounts of success and quickly find themselves struggling and teetering on trading their way out of the market when their accounts go below brokerage account minimums. Unfortunately, most novice emini traders fail to prepare for these highly liquid and volatile markets which leads to frustration and eventually desperation.
There are two rules all successful traders follow. The first, and probably the most important, is they know their personality. The financial markets move up and down everyday, pushed by crowd mentality and sentiment as reflected on daily charts. If a significant news item is released, either negative or positive, upward or downward pressure is easily recognized as the chart responds and interprets the news item.
Successful traders know their weaknesses, their strengths and they realize that losing trades are part of successful trading. The difference between a successful and unsuccessful trader is knowing how to handle losses and when to exit the market.
Understanding their personality traits and how they react to the market leads to the second rule. All veteran traders have a trading system in place and they follow the rules of their system without fail. Trading systems remove human emotion which is one of the largest reasons for failure among new market participants trading DOW futures. Greed, hope, fear and desperation have destroyed more brokerage accounts than other factor.
Implementation of a trading system eliminates doubt and relies on the market to indicate when the market should be entered and exited. Successful traders have the discipline to follow their system and trust it’s money management rules which allows them the confidence of knowing their system will get them out of the market should a trade go south. Self discovery and a sound trading system are the keys to success when trading DOW futures.