“no one ever won a war by dying for his country. He won it by getting the other guy to die for his country.”

Similarly, in trading it is not your job to lose money in the market.  In my belief system, there is no honor in losing money.

All the talk you hear about paying tuition to the market to learn to trade is foolish. If you cannot make money in the live market, you should be trading on the simulator.

The live market is for making money.

However, most futures traders consistently lose money in haphazard unplanned trading until they cry “Uncle” and give up trading. This is an all too predictable and unnecessary outcome. Until you can consistently make money, you should stay on the simulator.

Of course, trading on the simulator is not the same as trading in the live market.

However, you can get 90% of the benefit of live trading on the simulator with 0% of the cost.

Unless a trader is already successful, I start new mentoring traders in my Electronic Trader Mentoring Program on the simulator. The simulator, when used effectively, can help build the trader’s skills using a structured process. The process I teach traders is designed to start with a rational trading methodology, consistently executed - taking small losses and exploiting winning trades, winning days and winning months.

Perhaps, the greatest benefit of using a simulator is that it allows you to execute your clear, written Trading Plan in a variety of market conditions, gaining confidence and insight and adjusting your Trading Plan, as necessary.

To paraphrase another Patton quote,

“a good plan well executed today is better than the perfect plan executed next week.”

In the webinar, Simon Townshend spoke to fellow mentoring traders about how to look behind the charts to see the Supply/Demand dynamics that move prices.  This live webinar was recorded for future viewing. 

I intend to offer similar Saturday morning webinars in the future.  If you are considering joining my mentoring program, you can use this as another incentive to get started in the Electronic Trader Mentoring Program.

A friend of mine who invests in a variety of the largest and best-known Commodity Trading Advisors is down 5% for the year.

Three of my most experienced traders in the Electronic Trader Mentoring Program, each of whom had a great year in 2008, are up only modestly in 2009.

The reason that most futures markets have been hard to trade for short term traders is that a significant portion of the largest higher time frame traders - the traders who move the market - stopped trading at the end of 2008. In the case of Lehman and countless hedge funds, many of yesterday’s large traders will not be returning.

I have seen whole categories of important traders leave the market several times over my 37 years trading. My experience shows that new, large traders will emerge again.

In any case, the markets will not return to exactly the way they were before 2008. But, the markets will once again become filled with opportunities for traders who are prepared for them.

What is good performance in a difficult year?

I believe that in order to succeed as a professional short term trader, you need to figure out how to advance modestly in a bad year and be ready to make the most of opportunities in a good year.

For 2009, a successful performance on your part may be simply that you did not lose money. Your success should be measured by the extent you honed your skills as a professional trader while keeping your capital intact, ready for better times.

As for 2010, I would start the year trading conservatively. If the markets come alive with opportunities, be ready to change your strategy to take advantage of those opportunities.

Know that in good times, you need to press your advantage and in difficult times your object is to grow as a trader conserving your capital, vigilantly watching for opportunities to exploit.

Wishing you success in your trading,  Jeff

Copyright © 2009 by Jeff Quinto
All rights reserved

Learn how to use the “Quintos” of the day to your advantage.

I, particularly, enjoyed the excellent questions from the group in attendance.

You don’t want to miss any good trading days, but, at the same time, you want to be smart about avoiding low-probability days.

From an early age in sports and in school, we learn that the harder we work, the better our result.

I remember a saying that I heard, repeatedly, during my tenure as a trainee stockbroker, “hard work brings good luck”.

Put another way, the more effort and the more hours that we work, the greater the probability of our success.

However, successful trading is more about trading smart, than it is about the great number of hours devoted to it.

Before I begin with my theory of when to take the day off, let me issue a caveat.

Nearly everyone I meet and, certainly, everyone I coach in my Electronic Trader Mentoring Program is fully committed to trading.

My problem is not getting people to take their trading seriously.

My problem is getting people to take time off.

The following is meant as advice for people who would rather trade than do almost anything else.

Here is how to make your own holiday schedule.

Some days, are predictably non-productive. I would make a list of days that I would not trade and plan my schedule to include doing things I like, besides trading, on those days.

The following days are simply not worth trading:

• The day before any holiday and, in the case of Thanksgiving, the day after as well;
• All federal holidays that are not market holidays (Veterans Day, Columbus Day);
• The 2-3 days before and including quarterly futures roll-over in the case of stock index futures;
• The days between Christmas and New Years;
• The day before FOMC announcements and until 1:15PM CST on the day of any planned rate announcement; and
• European holidays (May Day, Easter Monday).

What about December and January?

The first three weeks of December can be excellent for trading.

Every year traders tell me they were surprised at how good their trading was in the first part of December.

The markets are liquid and volatile for the first three weeks and, then, a day or two before Christmas Eve, this exciting market comes to a screeching halt and remains quiet for the last week and a half of the year.

As for January, traders come back from the holidays on January 2nd ready to start what they hope will be their best year ever. Instead of the predicted great start to the New Year, they very often get “cooked” during the first few trading days of the New Year.

My advice is to avoid the first full week of the year, altogether.

This year, go someplace warm and extend your holiday to January 11th. By doing so, you will have avoided a potentially disappointing start to the year and you will arrive on January 11th prepared to confidently face 2010 fully rested and nicely tanned - ready to begin your best trading year, ever.

There you are; days that you can take off guilt-free knowing that you will be trading smarter because of it.

If trading smarter, not harder in 2010 is important to you, I can help. Check out my Electronic Trader Mentoring Program at www.ElectronicFuturesTrader.com.

One more thing, you might want to act now as the program is filling up with traders who will be trading smarter, not harder, next year.

Wishing you success in your trading, Jeff

Copyright © 2009 by Jeff Quinto
All rights reserved