6 Skills Every Trader Should Have Going Into Trading

Whether day trading, scalping, or investing, there are fundamental skills that each trader should master. Skill-building activities will help you sharpen your ability to make money and cash in on critical market movements.

1. Don't Be a Perfectionist

Consistent profits are achieved from winning more than you lose - not winning every single trade. There are plenty of professional traders who generate profits by winning just 10% of their trades by maximizing gains and minimizing their losses.

2. Stick to a Trading Plan

Developing a trading plan is extremely important. Day trading around your own set plan for each position will produce consistent profits. A trading plan planner should be your best friend when developing your own trading style. The key is sticking to what you've written down on paper.

3. Know the Odds

You should know the payoff odds for each trade that you take. Scalping produces large gains from small movements with higher risk than swing trading. Your trading plan should include a way to regulate how much capital you're willing to risk on each position - but you should never risk more than 2% of your total account value.

4. Complete Trading Plan

The skill to plan is the most important. A complete trading plan should be more than just "trade everyday from 9-3." A plan should include how to act in upswings and downswings and how to protect your capital. In many cases, a thin plan is worse than no plan at all. Stick to your guidelines to get the most out of each trade.

5. Ability to Keep Emotions Under Control

It's hard not to be emotional with hundreds or thousands of dollars on the line each moment of the day. Think like you would in a survival scenario; you've got to be calm and keep your head above the water. Many traders slip from their plan and take positions to cover losses only to lose more money. Over time, a complete trading plan will produce consistent profits, but only if you believe in it.

6. Know How the Market Responds

After getting some experience, you should be able to know how the market responds to certain events before they happen. If there was a negative Non-farm payroll statistic last month, and the Dow lost 60 points, it would be smart to consider that the same would happen again. History does repeat itself in the financial markets.

About the Author:
Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a provider of educational trading products and services that are available worldwide. Trading EveryDay has complimentary/FREE products, a Tools of the Trade eBook and a Trading Room Report, that are downloadable for your convenience.

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Emini Trading Systems - Albert Einstein and Emini Trading Systems

Albert Einstein was born in 1879 in a small German town of Ulm. He died in 1955 in Princeton, a small town in New Jersey, USA. He was a theoretical physicist, first and foremost, although it is not so unusual these days to see questions "what would Einstein do?" related to things that have little to nothing to do not only with theoretical physics but with science in general.

Could thus Einstein offer any insight into trading emini futures markets? Such as the futures for the S&P 500 index?

The full size contract for this financial market was established in 1982, its emini version, and the first emini market at all, appeared on the financial scene in 1997, in both cases a few decades after the death of the fellow in question. It seems therefore rather obvious to assume that Einstein would have absolutely nothing to say about trading emini markets, or emini systems, for that matter.

But this would not be entirely true. In fact, we believe, that this would be pretty wrong. For while Einstein was a physicist first and foremost throughout most of his active professional life, he was also a wise man and his profound statements about scientific matters can be applied to things outside science as well. Or, at the very least, some clear parallels to Einstein's pronouncements on science can be found in the world of emini trading systems.

Let us use two rather famous Einstein quotes to prove our assertion.

The first of these quotes is: "I want to know God's thoughts... the rest are details." When designing emini trading systems, or systems for other markets, you want to know what makes these markets tick, what drives their dynamics, what determines their behavior. In other words, you want to know Mr. Market's thoughts for it is he that rules them. Knowing his thoughts is like knowing God's thoughts in the matters of science. He is the utmost authority of the markets. He, Mr. Market, a mythical figure that even the least religious of traders believe in. You want to know his thoughts to design systems that the market forces respect, and vice versa, that respect these forces, that properly reflect these markets' nature and their intraday or longer term behavior, depending on the system primary time frame. You want to know what's essential as opposed to what's spurious and accidental. If you approach designing your emini systems this way, you stand a very good chance to come up with robust and profitable ideas.

Another famous Einstein quote, that perfectly applies to designing emini trading systems, is: "Things should be made as simple as possible, but not any simpler." There are many simple systems out there. Such as, say, the one based on trading the breakout of the first hour range, that for reasons inexplicable to this author, retails in the vicinity of $1000. Good luck making money with it, though. It may turn out to be a painful experience. The reason this system is not particularly good is because it is too simple. Systems like that are fine for educational purposes, but using them for trading in their crudest form is not very advisable. A good, sound, robust emini system needs to employ filters that would limit circumstances that are less likely to lead to a profitable outcome. Not all breakouts of the first our range, to use our example again, are created equal. Systems that are too simple usually do not employ any filters. In fact, some of them may even not be amenable to imposing filters that could improve them.

As you can see from these two examples, Einstein would certainly have quite a bit to say about how to design a profitable, robust emini trading system or other trading systems, for that matter.

If you would like to experience trading an emini futures system designed using ideas Einstein would approve of, please visit this page: http://www.eminimethods.com/system_g4.html

Waldemar Puszkarz, Ph.D., is a web veteran with 15 years of web surfing under his belt. By training, he is a theoretical physicist, but his interests are much broader than science and include trading financial markets, sports betting, poker, and researching online business opportunities. He is also an avid book reader and sports afficionado. Currently he is making his living mostly as a day trader. He has been in the trading trenches for almost a decade during which he has traded a variety of financial instruments. He is the owner and webmaster of Eminimethods.com (http://www.eminimethods.com) which provides free common sense trading education and simple trading systems for e-mini and stock markets as well as reviews of honest online business opportunities in Meet HOBO section of his site.

AP - World stock markets railled again Friday as confidence remained buoyed by positive U.S. economic data, hopes of further stimulus measures from Japan and China and an upbeat comments from Bank of America's CEO.

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