It's time for some inspiration as we look at a student profile and his journey thus far trading in the futures markets.
He's a Canadian student who began about one year ago knowing nothing about the world of trading. No courses, books or even what candle sticks were. He had some experience in real estate investing and worked in administration for a contractor in Vancouver. Ironically, he heard about Landshark from another employee who had been talking about it and decided to come to a Trading 101 Class in Vancouver to see what it was about.
As we've approached a year in he began trading live just a few months ago and is now between projects with his firm which has given him time to begin trading more. From speaking with him I can say there are three things that made it click for him with futures:
1. Understanding the importance of Monthly candles (Macro view)
2. Being focused and in front of the computer
3. Being selective with trades
Now with number one I can saw that most futures traders lack this - You end up shorting for ten cents when you should be looking only at long trades because the pressure from the larger time frame is saying so. It's really simple but most just forget to check the larger time frame direction. If you don't know how to do this or why this matters then you'll surely struggle. Secondly, he's not scalping in and out all day for 10 cent moves. When I had first started training others in 2013 9/10 of them were trading for $50 moves and $100 stops which is a recipe for disaster. The truth is, you need money to make money doing this and if a $100-$300 loss is going to set you off then you're likely under capitalized. This is one of the reason many educational companies send people to Forex; You can start with almost nothing ($100 accounts) but you're also going to make close to nothing.
I've seen his progression as he flew down to Scottsdale earlier this year for the Traders Summit and I've spent a lot of time recently in Vancouver. I would say (and you can ask him, we'll have him on the podcast if he agrees), that talking through the issues helps. You know, why do we care more about the larger trades? Why do we tend to be selective?
Today speaking with him in chat he told me he was up $1,800 and change on a Crude oil short using a 4 lot strategy with max risk of $1,000. So let's break that down for you absolute beginners.
4 Contracts of Crude oil requires $1,000 margin hold per contract for a total of $4,000.
He set is stop to 25 ticks ($250) per contract for a total risk of $1,000.
Total Gain: +$1,840
He then scaled out of the trade at various targets. This is important, we teach this in the E-Mini Futures Program. It matters and it will save you from being greedy.
This is his chart below with notes. If it looks like another language to you, no worries, it should. That's why we focus on learning how to use price action and read it so we understand it.
So ideally, before the trade, you want to set targets, usually three. This let's you set the risk for the trade head of time so you know where you risk is (His was $1,000) then profit targets. You won't change your plan as you're in the trade and you have a defined plan, not just pushing buttons and being erratic.
For this week, he is over $2,500 in gains and last week was at $2,100 in gains on a $20,000 account. This translates to 20% in two weeks using minimal risk.
And I get it, when you're new to this world it seems like BS, fake, not real. Why? Because most of us are used to handing our money over to financial advisors and checking the statements a few times a year. As long as we don't lose money and make a few percent we're usually happy. But you have to ask yourself, is it time to start taking control of your money and learning alternative ways to make it grow?
I hope this post inspires some of you and hopefully we'll get him on the podcast here soon.