This is How You Avoid Trading on Tilt

Posted by TopstepTrader on February 19, 2018

Let’s say you’ve done everything right. You know your entry and exit points. You’ve got your stop losses in place. Then the markets open, things don’t go as planned, and you start to lose.

For most people, this creates an immediate and unpleasant physical response: sweaty palms, rapid breathing, and increased heart rate. But the worst part may be how the sudden upsurge of emotion seems to eliminate your ability to think clearly.

Poker players call that “tilt.” Playing (or in this case trading) on tilt is almost always a sign that a losing streak is on the horizon. Let’s take a look at the signs so you can avoid tilt and the losses that come with it.

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Topics: Trading Basics, Trading Lessons, Forex, Trading Psychology, Futures

Last Week Changed Everything: Here's How You Can Profit Trading This Week

Posted by TopstepTrader on February 11, 2018

This will be known as the week that the volatility complex blew up. Two major short volatility ETFs literally imploded. XIV — Credit Suisse's short-term short volatility ETF — closed on Monday at $99 per share. As the VIX spiked after hours, the product lost 90% of its value to trade at less than $10 at the open on Tuesday. 

The spike in volatility led to a sell off in equities and the emergence of extreme moves in futures contracts. 

Here's what you need to know.

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Topics: Trading Basics, Trading Lessons, Futures

Repeated Failures Made This Trader a Success

Posted by TopstepTrader on February 07, 2018

Does this sound like a recipe for success? 

Get fired from your first job as a clerk at the Chicago Board of Exchange. Get a job as a trader and blow through your stake. Get a second chance and blow through that money, too. Get funded by a friend, but blow through so much of that money they cut you off before you can lose it all.

Probably not, but that’s the early path Larry Benedict took before becoming founder and CEO of Banyan Equity Management, LLC, a firm that managed more than $700 million in assets. Despite his less than promising start, Benedict ultimately strung together an impressive 20 years of net profitability as an options specialist in the XMI index on the American stock exchange for Spear, Leeds, & Kellogg.

You might think the moral of this story is about perseverance, but it’s not. The crux of Benedict’s success was his ability to adapt and learn how to manage risk. In days when market volatility spiked and prices are jumping everywhere, the ability to manage risk is what will keep you in the game. 

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Topics: Trading Basics, Trading Lessons, Market Wizards, Forex, Futures, Larry Benedict

4 Immediate Changes to Make to Your Trading in Higher Market Volatility

Posted by TopstepTrader on February 06, 2018

Futures trading firms have to carry a disclaimer: "An investor could potentially lose all or more than their investment."

While that warning seems overly cautious, on days when the Nasdaq ($NQH8) moves 20 handles at a time, it becomes clear why. Price can blow past your stops. If you trade like it's just any other day, you can lose more than you intend. 

Here are four changes to make to your trading to ensure that doesn't happen. 

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Topics: Trading Basics, Trading Lessons, Futures

3 Can't Miss Stories: The Best Posts from January

Posted by TopstepTrader on February 03, 2018

Except for a small blip, markets have continued their trend for most of the month.

Whether you’ve found opportunities depends in part on how well you’ve prepared. Even if you found yourself on the wrong side of a trade more often than you’d like, you can always get back on track.

Take a moment to read three of TopstepTrader’s most popular articles from January, and use the insights to make the most of February.

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Topics: Trading Basics, Trading Lessons, Futures

The Dos and Don’ts of Trading Expectations

Posted by TopstepTrader on January 24, 2018

Some people come into trading with high expectations, thinking they will earn enough to retire with just a few trades. We hear stories about traders like John Paulson who made billions shorting the housing market in 2008. Or George Soros who made $1 billion shorting the British Pound in 1992

What doesn't get covered in these news stories is the decades they put into their craft before they made it big. How they traded one and two lots to build up their confidence and performance. 

Not only do high expectations usually come crashing down quickly, but they can actually lead traders to make bad decisions. Avoid that problem with this checklist of dos and don’ts for setting expectations.

Watch our CVO Michael Patak and Senior Performance Coach John Hoagland talk about trading expectations in this episode of Trader Behavior. 

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Topics: Trading Basics, Trading Lessons, Forex, Futures

This is How a Winning Trader Bounced Back from Blowing Up an Account

Posted by TopstepTrader on January 22, 2018

You may not have heard of Linda Bradford Raschke. She is a commodities and futures trader with a career that spans four decades. Throughout her trading career, Raschke prioritized consistency and longevity. That's likely because, like many traders, her first experience trading her own account didn't go so well. 

Like many other floor traders, Raschke got her start with a $25,000 stake given her by another trader. She traded equity options in the pit of the Pacific Coast Stock Exchange. After an auspicious start where she doubled her money in three months, Raschke found herself in a position she thought she understood. As she told Schwager in New Market Wizards, she was short calls in a stock that was a takeover candidate with just one day to go to expiration. The stock was trading $32 and she was fine so long as the stock didn't go above $55. 

Then, the unexpected happened. Another company offered $65 for the shares and Raschke was out her $50,000 — plus another $30,000 as her account went into the debit. 

Instead of sending Raschke into a spiral, the loss only solidified her passion for trading. She was able to get another stake and never let that happen again. Here's how she bounced back to become one of the greatest traders of modern time. 

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Topics: Trading Basics, Trading Lessons, Market Wizards, Forex, Futures, Linda Bradford Raschke

4 Ways to Profit from a Successful Routine

Posted by TopstepTrader on January 17, 2018

The best performers in the world all rely on routines. They are not winging it. Tom Brady, five-time Super Bowl winning quarterback and four-time Super Bowl MVP, goes to bed every night at 8:30 PM. He reportedly wakes up at 5:30 AM to get to work watching game film and working out.

Routines provide consistent feedback and increase performance. In any area you want to excel, you have to develop a routine. It's as simple as that. 

Trading is no different.

To get you started, here are four tips for creating a routine that will help you become a successful trader.

Watch our coaches talk about developing a successful routine in this episode of Coach's Playbook. 

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Topics: Trading Basics, Trading Lessons, Forex, Trading Plan, Futures

5 Questions with a Funded Trader: Risk and Reward

Posted by TopstepTrader on January 16, 2018

Fernando V. in New Jersey has been trading for five years, but things have just recently clicked. After our interview, one thing struck us: he is simultaneously very comfortable with high degrees of risk - trading around events that move futures - and also paranoid about losses - placing stops at consistent levels. It seems that the second aspect may be why he’s been doing well in his Funded Account. In fact, in November and December, he was able to make $7,500 in withdrawals.

We recently caught up with Fernando to talk about how his trading is going and advice that he would have for others in the TopstepTrader program.

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Topics: TopstepTrader Funded Traders, Success Stories, Trading Lessons

4 Don’ts from a Trader Who Could Move the World's Largest Futures Market

Posted by TopstepTrader on January 09, 2018

You might think Tom Baldwin, investor and founder of the Baldwin Group Ltd, got lucky. In 1982, he left his job as a product manager for a meat-packing firm and leased a seat on the Chicago Board of Trade with just a $25,000 stake. Six years later, he was one of the largest individual traders of Treasury Bonds ($ZB), often trading as many as 20,000 contracts - $2 billion face value - in a single day. And he did this with absolutely no trading experience.

Sounds pretty lucky, right? But here’s the rub: traders have to make their own luck.

Read on for Baldwin’s four tips on how to do just that.

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Topics: Trading Basics, Trading Lessons, Market Wizards, Tom Baldwin

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