10 traits commonly shared by successful derivatives (futures) traders
    

My own success as a professional futures trader has enabled me to develop professional relationships with other successful traders.  Through these relationships, I have been able to identify important key traits which are common among consistently successful traders.  As a commodity trading advisor,  I have also discovered that there are many misconceptions among the general public regarding the traits and lifestyles of professional traders.  Down through the years and even today the professional trader remains somewhat of an unsolved mystery to the general public.  Fueled by the lure of easy money, the public has portrayed futures trading as an easy way to get rich over night, if you have the magic key or what is known as the "Holy Grail".   This search for the holy grail is a major obstacle facing most new traders and must be overcome before success can be realized.  There is no holy grail in the sense of a trading formula. The key to lasting success in this business actually depends more upon a disciplined common sense approach where the focus is on minimizing risk.  Discipline is the key to maintaining a low risk trading strategy or approach.  One of the most common and important traits I've found among virtually all longer term successful futures traders is a strong emphasis on risk control and money management. 

1. Contrary to the stories and rumors,  those of us who trade professionally,  trade well below our means!  That's how we stay around for years!  This is the same concept as living below your means, a trait shared by the majority of self-made multimillionaires in the U.S. and world as well.  
   

2. While the inexperienced trader dreads taking a loss, the professional position trader does not mind taking losses at all!  Personally,  I've been taking losses for years!  This, along with my practice of trading below my means is precisely how I have managed to stay in this business for so long!  
   

3. All successful traders are very persistent and determined to be successful.  Most professionals spend long hours analyzing the markets and often may appear obsessive towards their work.  The truth is they are very passionate towards their work.  However, most professionals do take breaks on a regular basis,  spending time with family,  enjoying a hobby and/or simply resting!  Successful traders have one very important trait in common during their learning stage,  They never give up! To achieve success in this business,  one must be willing to get back up when knocked down and try again and again in order to finally achieve success.  The analogy I like to use is a comparison between the new trader and novelist Skier.  To learn how to ski one must first fall down and then get back up.  A critical component of learning how to ski has to do with learning how to recover from a fall and get back up properly.  All professional skiers go through this process while learning the skill and art of skiing.  Successful traders go through the same process in the beginning as well.  It is amazing how many new traders expect to start off skiing down the black-diamond mountains without any lessons or any experience.  They quickly learn after a painful fall that this is not as easy as it may look. All successful traders had to start  somewhere.  No one starts out being successful at trading right away (other than beginners luck)!  It takes time to acquire the skills, accuracy, and necessary discipline that all successful traders have in common.   Many failed (lost all risk capital) several times before eventually becoming successful.  One of the more common mistakes I see often as an advisor and mentor to new traders is unreasonable expectations in conjunction with a lack of basic risk capital at startup.  
   
   Roughly 80% of all new startup businesses that fail in the U.S., do so because they are under-capitalized.  Many inexperienced traders will come into this business under-capitalized as well.  Greater than 80% of them will fail because of this common problem.  To avoid this pitfall, one should wait until they have saved up adequate risk capital to start their business.  In addition, do not "feed"  your account.  This is another mistake I see regularly.   New traders tend to be fearless or extremely fearful.   The extremely fearful often limit their chances for success by not placing an  adequate amount of risk capital in their account at startup. The reason is an overwhelming fear of losing it!  Instead they gradually lose it all by starting off with too little and adding more, little by little, as they continue to lose money and become frustrated.  It takes money to make money and in order to trade properly using proper stop placements and position/money management, one must have a certain amount of risk capital.  If you are going to give this business a serious try, do it right and start off with a decent size account.  If you don't have enough risk capital, save until you do. The markets aren't going anywhere!  If you are overwhelmingly afraid of losing your risk capital, then perhaps this business is not appropriate for you.  
   

4. Professional traders do not over trade.  We do not trade for the sake of trading.
   
   

5. We do not trade on emotion.  Professionals are aware of their own weakness concerning fear, greed and ego.  We realize this is something we must always be on guard for.  Fear and greed is the catalyst that leads to trading destruction.   Professional traders have leaned about something called a "threshold".  Everyone has a threshold for losses & rewards.  This is relative to an individuals net-worth and the amount of risk capital they have.   Professionals have learned that they are more likely to lose control of fear and greed if the equity in their account fluctuates wildly like a roller coaster.  In order to maintain a "steady-state" (i.e. smooth ups and downs), the professional will trade below the threshold that triggers extreme fear and greed.  I have developed special "equity" graphs which track the price fluctuations on a day-to-day basis. These help traders determine whether or not a particular trade or market is appropriate for their size account and threshold levels.
   
   

6. We do a great deal of waiting for the right conditions.  Contrary to what the full-service brokers will tell you, there is NOT always an opportunity. The inexperienced traders will often follow a brokers advice and trade when there is no real opportunity.  Remember that full-service brokers are after commissions. There is a big conflict of interest between full-service brokers and an inexperienced trader.   Professional traders do not use full-service brokers.  We use low commission discount brokerage firms who only place trades for us and do not offer any advice or recommendations.
   
   

7. Established veteran traders have a system and they follow it.   If you do not have a system or if you are not satisfied with the one you are using,  I highly recommend you try this system. My system is a unique and versatile system covering 45 markets.  The system uses fundamental data for trigger selections and technical indicators for the timing of entries and exits. The entire system is loaded into the private vault area of the web-site. Members can access the system 24 hours a day.  There is no need to load any diskettes, software, or bother with downloading price data onto your computer each evening since everything is located on the website.  The charts and graphs are updated daily by 5:00pm PST with the officially released open outcry futures prices for the day.  All indicators are automatically applied to each chart or graph, and all a member needs to do is point and click to bring up the chart for determining setups, entries, exits, and profit objectives.  I also have special technical data, reports, spread graphs and other pertinent proprietary information.  There are over 800+ proprietary graphs which are completely unique,  found nowhere else in the world.  I know this because I personally developed the entire system from the ground up.  All indicators and software were developed by myself in the early 90's.  There are four on-line manuals and a help-section to assist members with using the system.  I also assist by tracking positions, entries, and stops in two reports I publish each day (morning & evening).  In addition, I answer email questions and have an assistant who helps with the email as well.  The system is very unique and thorough, covering the markets from all angles.  This is done by combining a traditional proprietary technical approach with a unique proprietary fundamental approach. If you'd like to learn more about membership, Please click on the link below.  You can scroll down through the membership page to read more about the system and our service for assisting new and seasoned traders alike.  click here --- >   Read more about the Membership and system!
   

8. Professional successful traders are more concerned about risks than they are the rewards. The public tends to be preoccupied about the potential profits.   The professional on the other hand is more concerned with assessing, controlling, and managing risk and exposure to risk.  Professional traders always use stops.
   

9. A simple trait that exists among the majority of off-floor professional position traders is careful record keeping of all trades along with a detailed journal of notes and observations on market conditions, psychological reactions to gains and losses and so forth.   I update a journal daily with my trades, entries, exits, stops, support, resistance and so forth.  I also log observations much in the way an engineer would do when conducting an experiment.  This is important, especially with the markets the way they are now.  Many times certain conditions will exist which lead to a certain out-come.  You'll notice this more and more as you log your observations routinely.
   
   

10. Professional position traders hold profitable winning positions!   We dump losers taking losses early, while holding the winners until the market changes direction.  This is the simple practice of staying with the trend.  One of the most powerful edges a futures trader can obtain is to hold winners and dump losers.  Using this methodology, the trader will be able to allow winning positions to grow into potentially extremely large winning positions if the market begins to trend.  Some trending markets can make a trader tens of thousands of dollars per one contract!   Now imagine if an inexperienced trader would hold onto a losing position that has begun to trend.  This is what frequently happens with new traders.  They won't let go of a losing position and the market continues to go against them until they are finally forced out on a margin call.  When the new or unsuccessful trader latches onto a winning position, they often exit out of it quickly in order to take a profit.  This is the opposite of what they should be doing. Remember - Professionals hold winning positions and when the market starts to trend, the professional will use a trailing stop (more often than a target). The trailing stop will allow the professional to hold the winner with the trend for the full duration of the move.  This methodology is taught in my manuals and covered in our charts and technical data.