The Four Biggest Mistakes in Futures Trading
Rights Contact Login For More Details
- Wiley
More About This Title The Four Biggest Mistakes in Futures Trading
English
"Veteran trader Jay Kaeppel describes the opportunities and challenges of futures trading with easy grace and engaging wit. After exploring the risks and rewards, Kaeppel shows how the average trader can succeed in futures by embracing four key principles of trading mastery."
—Nelson Freeburg, Editor/Publisher, Formula Research newsletter
—Nelson Freeburg, Editor/Publisher, Formula Research newsletter
From the creator of Futures Pro Trading System Software winner of 6 Readers Choice Awards in Technical Analysis of Stocks and Commodities magazineThis book will help you trade futures profitably by showing you how to identify-and-avoid making four common mistakes that can derail your plan and reduce your profits. Following on the heels of his original bestseller, The Four Biggest Mistakes In Option Trading, system developer Kaeppel now focuses his attention on the volatile futures market and shows traders how to trade these markets to their advantage.
In Kaeppel's quick reading style you'll
- Learn how to assess whether you are financially-and emotionally-ready to trade futures.
- Determine how much money you can afford to risk.
- Learn what leverage is and how it can be used to generate above average returns without exposing yourself to too much risk.
- Understand why "fearing" the market is better-and-safer-than downplaying risk.
Now, steer clear of tr4ading missteps and learn how to trade more profitably-trade after trade-with Kaeppel's winning strategies.
English
Jay Kaeppel is the Director of Research at Essex Trading Company Ltd. and an active Commodity Trading Advisor (CTA). With over 12 years of futures trading and system development experience, his expertise as a system developer has been noted by Technical Analysis of Stocks and Commodities magazine. "Formula Research," a national monthly trading system development advisory, editied by Nelson Freeburg has acknowledged Jay Kaeppel's expertise as a trading systems developer by using two of his original systems as the foundation of their own stock market and gold fund trading systems.
English
INTRODUCTION xi
The Bad News, The Worse News, The Good News and The Better News xi
Why So Many Fail xii
What Sets Futures Trading Apart xii
Attacking From The Bottom Up Versus The Top Down xiv
One Word of Warning xv
Topics To Be Covered xv
MISTAKE #1: LACK OF A TRADING PLAN 1
What is Mistake #1 1
Why Do Traders Make Mistake #1 2
The Recipe For Trading Success (That Nobody Wants To Hear) 5
How To Avoid Mistake #1 5
The Litmus Test 6
How Much Capital Will You Commit
To Futures Trading 7
What Market or Markets Will You Trade 9
What Type of Trading Time Frame Is Best For You 10
What Type of Trading Method Will You Use 14
What Criteria Will You Use To Enter a Trade 16
What Criteria Will You Use To Exit A Trade
With A Profit 17
What Criteria Will You Use To Exit A Trade
With A Loss 18
A Word Of Advice: Adhere to the Four Cornerstones 19
Go With The Trend 20
Cut Your Losses 21
Let Your Profits Run / Don’t Let Big Winners
Get Away 21
Summary 22
MISTAKE #2: USING TOO MUCH LEVERAGE 25
What is Mistake #2 25
Understanding Leverage 27
Why Do Traders Make Mistake #2 30
How To Avoid Mistake #2 31
The Role of Mechanical Trading Systems 33
Determining The Amount of Capital Required 33
Single Market Factor #1: Optimal f 34
Calculating Optimal f 36
Single Market Factor #2: Largest Overnight Gap 36
Single Market Factor #3: Maximum Drawdown 40
One Caveat to Analyzing Trading System Results 41
Arriving at a Suggested Dollar Value Per Contract 42
Arriving at an “Aggressive” Suggested Account Size 44
Arriving at a “Conservative” Suggested Account Size 45
Arriving at an “Optimum” Suggested Account Size for Your Portfolio 46
Digging a Little Deeper 47
Summary 48
MISTAKE #3: FAILURE TO CONTROL RISK 51
What is Mistake #3 51
Why Do Traders Make Mistake #3 52
How To Avoid Mistake #3 54
Risk Control Method #1: Diversification
Among Different Markets 56
Risk Control Method #2: Diversification Among
Trading Time Frames and Methods 59
Risk Control Method #3: Proper Account Sizing 62
Risk Control Method #4: Margin-to-Equity Ratio 63
Risk Control Method #5: Stop-Loss Orders 65
Placing a Stop-Loss Order In the Market Place 66
Using Mental Stops 68
Not Using Stop-Loss Orders At All 70
The One Important Benefit of Stop-Loss Orders 70
Summary 71
MISTAKE #4: LACK OF DISCIPLINE 73
What is Mistake #4 73
Why Do Traders Make Mistake #4 77
How To Avoid Mistake #4 78
Overcoming The IQ Obstacle 79
A Word of Advice: Don’t Think, React 82
Avoid Simple Traps 83
The Cure for “Woulda, Shoulda, Coulda” 85
System Development versus System “Tinkering” 87
Asking The Right Question 90
Summary 92
THE FOUR BIGGEST MISTAKES IN FUTURES TRADING CONCLUSION 95
APPENDIX A: Mathematical Formula for Standard Deviation 99
Standard Deviations 99
The Bad News, The Worse News, The Good News and The Better News xi
Why So Many Fail xii
What Sets Futures Trading Apart xii
Attacking From The Bottom Up Versus The Top Down xiv
One Word of Warning xv
Topics To Be Covered xv
MISTAKE #1: LACK OF A TRADING PLAN 1
What is Mistake #1 1
Why Do Traders Make Mistake #1 2
The Recipe For Trading Success (That Nobody Wants To Hear) 5
How To Avoid Mistake #1 5
The Litmus Test 6
How Much Capital Will You Commit
To Futures Trading 7
What Market or Markets Will You Trade 9
What Type of Trading Time Frame Is Best For You 10
What Type of Trading Method Will You Use 14
What Criteria Will You Use To Enter a Trade 16
What Criteria Will You Use To Exit A Trade
With A Profit 17
What Criteria Will You Use To Exit A Trade
With A Loss 18
A Word Of Advice: Adhere to the Four Cornerstones 19
Go With The Trend 20
Cut Your Losses 21
Let Your Profits Run / Don’t Let Big Winners
Get Away 21
Summary 22
MISTAKE #2: USING TOO MUCH LEVERAGE 25
What is Mistake #2 25
Understanding Leverage 27
Why Do Traders Make Mistake #2 30
How To Avoid Mistake #2 31
The Role of Mechanical Trading Systems 33
Determining The Amount of Capital Required 33
Single Market Factor #1: Optimal f 34
Calculating Optimal f 36
Single Market Factor #2: Largest Overnight Gap 36
Single Market Factor #3: Maximum Drawdown 40
One Caveat to Analyzing Trading System Results 41
Arriving at a Suggested Dollar Value Per Contract 42
Arriving at an “Aggressive” Suggested Account Size 44
Arriving at a “Conservative” Suggested Account Size 45
Arriving at an “Optimum” Suggested Account Size for Your Portfolio 46
Digging a Little Deeper 47
Summary 48
MISTAKE #3: FAILURE TO CONTROL RISK 51
What is Mistake #3 51
Why Do Traders Make Mistake #3 52
How To Avoid Mistake #3 54
Risk Control Method #1: Diversification
Among Different Markets 56
Risk Control Method #2: Diversification Among
Trading Time Frames and Methods 59
Risk Control Method #3: Proper Account Sizing 62
Risk Control Method #4: Margin-to-Equity Ratio 63
Risk Control Method #5: Stop-Loss Orders 65
Placing a Stop-Loss Order In the Market Place 66
Using Mental Stops 68
Not Using Stop-Loss Orders At All 70
The One Important Benefit of Stop-Loss Orders 70
Summary 71
MISTAKE #4: LACK OF DISCIPLINE 73
What is Mistake #4 73
Why Do Traders Make Mistake #4 77
How To Avoid Mistake #4 78
Overcoming The IQ Obstacle 79
A Word of Advice: Don’t Think, React 82
Avoid Simple Traps 83
The Cure for “Woulda, Shoulda, Coulda” 85
System Development versus System “Tinkering” 87
Asking The Right Question 90
Summary 92
THE FOUR BIGGEST MISTAKES IN FUTURES TRADING CONCLUSION 95
APPENDIX A: Mathematical Formula for Standard Deviation 99
Standard Deviations 99
English
"Veteran trader Jay Kaeppel describes the opportunities and challenges of futures trading with easy grace and engaging wit. After exploring the risks and rewards, Kaeppel shows how the average trader can succeed in futures by embracing four key principles of trading mastery."
—Nelson Freeburg, Editor/Publisher, Formula Research newsletter
—Nelson Freeburg, Editor/Publisher, Formula Research newsletter
