Here’s a paraphrase of a comment that I got, that spurred today’s article:

It is easy to make money on the free trading platforms, but much harder when you playing for real money.

Papertrading IS different from trading your own money… there’s no doubt about that…

What’s the major difference?

Emotions.

When papertrading often times you will be able to see situations clearer, act more decisively and cut your losses much quicker because you don’t associate the gains and losses you’re making with your hard earned money.

The challenge for most people making the transition is that after papertrading and racking up huge gains, they jump into real trading expecting the same results.

This would be true if you could act with the same clarity as you do when ‘fake’ money is on the line…. unfortunately few people have the ability to do this.

So how can you make the jump?

One way is to gradually ramp up your trading size.

What do I mean?

Ok, first off, get strated with papertrading. I know I said that it isn’t like real trading BUT it does give you the opportunity to get your feet wet without risking your trading capital right off the bat.

After you’ve spent some time refining your papertrading AND have strung together some gains AND have been following you plan AND feel ready to move the next stage, start trading real money, but only a mini contract or 100 shares to ease your way into the market.

Why would you do this?

Trading a mini contract or 100 shares allows you to remain emotionally detached.

Gaining or losing a few bucks here and there will allow you to act just as you did when you were papertrading… that’s the point!

As you are able to trade this small amount and generate a string of gains then increase it… for example double it.

Rinse and repeat.

At each stage trade those funds until you feel that it’s almost too easy AND you are able to generate gains.

The key lesson to remember at this point is:

You’re not trading for money, you’re trading for skill.

What you’re doing is developing the emotional comfort that comes with trading amounts that don’t scare you. And this is where most people go wrong… most often people overtrade by risking amounts that constantly put their entire trading accounts into jeopardy… as a result they are fearful and can’t think straight. They start hoping and praying instead of analyzing and trading. If you ever find yourself in that position, realize that the cure is to scale back your position, or close it completely.

As you follow this gradual scaling process you’ll notice that you’ll be able to focus more on trading and less on the money… and that’s what it’s all about.

Stop increasing your trading size when you are trading the position sizes that are inline with your account size and risk tolerance. (I cover this in detail in Market-Millions.)

Continued Success!

Ray

Categories: Trading
3 Comments »

OK, here’s the list that was compiled from your recommendations.

I’ve listed them in alphabetical order, as they’re not ranked by vote or recommendation. Market-Millions.com and Day-Trading-Secrets-Revealed.com were included because they were submitted by readers, honest

Bettertrades.com
Day-Trading-Secrets-Revealed.com
Dynamic trading by Robert Miner
Market Club, by INO.com
Market-Millions.com
“System Tutorial” of “Gorilla Trades” website
Schaeffersresearch.com
Tradertech.com/vantagepoint_overview.asp
The Options University on options trading
“Trade Guider System” software, and their training manual:” Master The Market” authored by Tom Williams.
Vantage point, forexsoft.us
1stdaytradinginformation.com

I am not personally familiar with all the courses, nor do I necessarily recommend them… I’m just sharing what was submitted as part of the survey.

Continued Success!
Ray

Categories: Trading
1 Comment »

Yesterday, someone asked me why I use so many poker comparisons.

So today I’ll explain… 2 reasons actually:

The first is I’ve only recently started following the growing popularity in poker.

Not being a gambling man myself, I used to shy away from the game. (I never saw trading as gambling, so that didn’t count in my mind.)

But after closer inspection I started to understand that unlike most casino games, poker wasn’t based on sheer luck… and instead was very closely related to trading.

You see, with the popular game of ‘No Limit Texas Hold Em’, after getting dealt a pair of cards you decide whether you will bet or not.

That’s essentially the ‘trade setup’. After the market gives you something, you decide whether you will enter into a trade.

What transpires with the additonal cards is equivalent to how the market unfolds after your entry. You decide whether to see what happens (check), add to your positions (bet more) or close out the trade (fold).

What I really found of great interest is how the emotional discipline of trading carries over to poker almost seemlessly. And it’s only now that I realize why so many traders reference gambling analogies… and why many of the traders I know are avid poker players.

The second reason I’m writing more about poker, is because it gives me a legitimate excuse reason to watch hours of poker

You see, when I’m plopped down in front of the TV watching hour after hour of poker tournaments and my wife asks me, “Are you busy?”, I can respond, “Yes, I’m busy… can’t you see I’m working?!”

Continued Success!

Ray

Categories: Trading
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In an effort to expand on the concept of support and resistance, in reference to an earlier article, let’s take a look at the EUR/USD.

Here’s the daily chart that I’m currently following. In it you see the yellow line at the bottom, marking off a key support level that I expected prices to test.

The closest it got was right at the end of May, before prices moved back up.

Prices can still come back to test this level, at which point we’ll see how this support level holds up.

Now how did I come to this support level?

It’ll be clear by taking a look from a further perspective…

If you trace along the yellow line, you can see, at the beginning of December that level acted as a very strong resistance point, halting the upswing started in mid-October.

That resistance price level was then tested again in mid-March, and created a degree of consolidation before breaking through to the highs seen in early May.

Quite simply by looking for areas where price was supported or resisted in the past I use that as my guide.

The longer that a support/resistance level has held, the more weight I give to it.

After defining them, I then watch how the price acts around them. This is where you pick up clues on what the market wants to do.

To finish, you’ll also note that the high formed in early May now becomes a key resistance point, which may form the upper level to a trading range, and if broken will potentially allow price to move up unrestricted until it meets its next resistance point.

I hope this helps to explain a bit more how I look for key support and resistance levels.

Continued Success!

Ray

Categories: Trading
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Yesterday I saw the luckiest poker player I’ve ever seen.

It was a tournment featuring 3 professionals and 3 amateurs.

The final 2 remaining players happened to be a professional and an amateur.

What was jaw dropping was how well the professional was playing… making all the right decisions, doing all the right things… while the amateur seemed to just be flying by the seat of his pants… yet miraculously managed to luck out exactly when he needed it.

To make a long story short, the amateur lucked out and strung together an incredible streak to win the $1.2 million prize, seemingly with sheer luck.

What does this have to do with trading?

3 things…

1. Sometimes you can do all the right things and lose money.
2. Sometimes you do all the wrong things and make money.
3. Dumb luck may put some money in your pocket every now and the, but don’t depend on it as a winning long term strategy.

Continued Success!

Ray

Categories: Trading
4 Comments »