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Why Traders Set Unrealistic Expectations... and How to Improve

Posted by TopstepTrader on May 16, 2018

"Trading is the hardest way to make easy money." — Michael Patak

Have you set a goal to make $1,000 trading? Because of leverage in futures, many traders have made four-figures in a single trading day. But averaging four figures — the equivalent of $250,000 annual salary — is another story. 

When TopstepTrader's Founder and CVO Michael Patak started trading, his goal was to make $1 million a year. That year, he lost $30,000. It was only after he reset his expectations, found out how much he had to make to sustain a living as a trader ($100 per day), and focused on small gains that he became successful.

As he says in this episode of Trader Behavior, "I decided that if I can't make $65,000 trading, then I have no business doing this every day." 

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

This is the Best Way to Place a Stop

Posted by TopstepTrader on April 20, 2018

If you are trading without a stop, you are playing with fire. Not because the market can move 100 ticks in a second — though it could. But because then, you haven't clearly defined your risk. And without doing that, you are likely to let your market bias keep you in a trade longer than you should be... increasing losses.

That is the kiss of death. 

Just because you should have a stop doesn't mean that all stops are created equal. There are three main ways to set a stop: (1) financial based on the amount of money that  you are willing to lose; (2) static — your stops are the same for every trade; and (3) technical — you use market information to tell you when your thesis is proven wrong. Here are the pros and cons to each. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

The Secret to a $2k Week

Posted by TopstepTrader on March 16, 2018

TopstepTrader's founder and chief visionary officer, Michael Patak, joins Senior Performance Coach John Hoagland for a special episode of Trader Behavior. This week, Michael and John focus on a scenario that funded trader Bob R. faced last week  and how proper from management led to a $2,000 trading week.

In the week, Bob had a great day trading on Monday before hitting his loss limit on Tuesday, Wednesday and Thursday. Yet because he had set his personal loss limit at $350, he knew exactly what he could possibly lose each day and built that into his trading plan. He came back on Friday knowing that he couldn't lose money on the week (because he was up more than $350) and added $1,000 to his account. In total, he profited $1,950 on the week!

All this is to drive home a point: the way to increase profits is to actually tighten your losses. Bob has just 47% winning days, yet because his winning days are 2.5x his average losing days, he doesn't need to be right all the time to be profitable. Here's how tighter losses actually equal bigger profits. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

It's Time to Kick Your Market Bias to the Curb

Posted by TopstepTrader on February 15, 2018

Markets are uncertain and ever changing. If the last two weeks hasn't reinforced that, then nothing will. 

As traders that watch the markets every day, it's hard not to form an opinion on where they should go. It would be very easy to view the recent run-up in equity futures as baffling. It may just not make sense given how sharply they sold off.

But there's one small change that can help you kick your bias to the curb: realize that markets can do anything. 

In this episode of Trader Behavior, Senior Performance Coach John Hoagland and CVO Michael Patak share how they learned to view the market as an ever-changing organism and how that resulted in better trading.

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

Change Your Thoughts, Change Your Behavior

Posted by TopstepTrader on February 03, 2018

No it's not quite as easy as, "If you believe it, you can achieve it." Trading is hard. But everyone has seen those moments in sports when momentum changes — like when an underdog finally believes they can win or a team that was down and out gets a lucky break and all the negative energy seemingly evaporates. The same can happen in your trading. 

Those moments of clarity are ones to take advantage of. You are in a flow state with the market. That's when your P&L can more than make up for the losing days. 

Senior Performance Coach John Hoagland and CVO Michael Patak talk through it and share how they keep positive energy going. Check it out and leave any feedback in the comments. Enjoy.

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

This is How to Master a Trader's State of Mind

Posted by TopstepTrader on January 19, 2018

If you believe it, you can achieve it. OK, that's a ridiculous sentiment - but it bears some truth. Your state of mind is incredibly important to your trading performance. No, that doesn't mean that you can wish the market higher, lower or sideways. 

But if you come into the trading day thinking that there's no way you can dig yourself out of a hole you got in, for example, then you might as well not even trade that day. You have little shot at profits. 

How do you improve? Senior Performance Coach John Hoagland and Mick Ieronimo talk through it and share how they've kept a positive (but realistic) state of mind. Check it out and leave any feedback in the comments. Enjoy.

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Topics: Trader Behavior, Performance Coaching, Trading Basics, Forex, Futures

Mastering Stress, Anxiety and Trading - Trader Behavior

Posted by TopstepTrader on January 13, 2018

Stress and anxiety are inevitable parts of trading. As traders, we're trying to predict the future. And by definition, the future is unknowable. But there's a difference between normal stress and axiety and debilitating levels of those emotions. Too often, we let that difference be our P&L. 

In this week's Trader Behavior segment, Senior Performance Coach John Hoagland and Chief Visionary Officer Michael Patak talk about ways they've learned to recognize and then overcome stress and anxiety in their trading. 

Tip for improvement: Get involved in a trading community (like TopstepChat). Being able to ask for advice, get objective help and realize that most other traders have struggled with your same issues go a long way toward relieving the stress and axiety you may feel. 

Check it out and leave any feedback in the comments. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics

In Trading, Being Wrong Ain't So Bad - Trader Behavior

Posted by TopstepTrader on January 06, 2018

Warren Buffett has two rules to investing: 1) "Never lose money;" and 2) "Never forget rule No. 1." While Buffett is inarguably one of the best investors of all time, but these two rules are more hyperbole than anything else. In fact, in trading, we have a different No. 1 rule: always ensure that you can trade for tomorrow

Trading will involve losing money. It will involve being wrong. But that isn't so bad. In this week's Trader Behavior, John Hoagland and CVO Michael Patak talk about why they learned to embrace being wrong in trading - and how that helped them progress in their trading.

Tip for improvement: When you take a loss, change your thinking to: "OK, good. I just paid the market for information." Then take that information to make more money later. Since trading is so mental, changing your thinking can do a lot toward improving performance. 

Check it out and leave any feedback in the comments. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics

Stop Being Your Own Worst Enemy - Trader Behavior

Posted by TopstepTrader on December 14, 2017

There are so many paradoxes in trading. We are quick to take winners off the table and slow to cut losing trades. Why? 

We often know intuitively what we should do, but we don't do it. And then we beat ourselves up for not doing what we knew we should do. It can become a vicious cycle. 

In this week's Trader Behavior, Dan Hodgman joins John Hoagland to explore these ideas and offer traders a way that they can better manage their emotions and trade better. Check it out and leave any feedback in the comments. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics

Trade Better by Paying Attention to Your Competitors - Trader Behavior

Posted by TopstepTrader on December 11, 2017

There is no shortage of participants in futures markets - from actual producers and hedgers to high-speed computers colocated at the exchanges scalping for ticks... and everywhere in between. Thinking about the market as a collection of these different players with different interests can help give you a leg up on the competition. 

In this week's Trader Behavior, Senior Performance Coach John Hoagland and CVO Michael Patak talk about how they break down the market to help predict price movements.

For example, the two talk about the power of the prior day's settlement as a magnate for prices. They present a scenario where overnight traders push prices higher - getting long. If the prices don't follow through early in the U.S. session, the market has a tendency to move back to settlement as those traders get out of their positions. 

Check it out and leave any feedback in the comments. 

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Topics: Trader Behavior, Performance Coaching, Trading Basics

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