Common Sense in Trading Today

January 23, 2017 11:19AM CST

If you have read any of my past blogs, you know that I don’t generally give specific market advice like buy here or sell there. I prefer to educate the trader on how to manage money, protect a position and share other common sense rules that will keep you around for the next trade. I am sure you have heard this one before, “the trend is your friend.” Counter trend traders can have success on a short-term basis using key support and resistance numbers. But what makes the counter trend trader successful is to know when to surrender to the trend. I am sorry to be repetitive, but the first thing to do after entering a new position is to place a stop loss. How much are you willing to risk on the trade? At what point will you surrender to the trend? Remember the market is always right. You have to be able to swallow a loss without it leaving a bitter taste in your mouth. If you do not protect your position and if you cannot face the fact that you are wrong the market, you will become like a deer in the headlights, staying with the loss so long that you miss other market opportunities. I have been witness to too many traders who refuse to exit a loss until the market forces them out. Be in control of your own destiny by setting your parameters from the beginning and sticking to your plan. If you would like advice on the best way to protect your trades or you would like to discuss any other commodity market opportunities, please contact me at 888-861-1584 or at LTaylor@rjobrien.com

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.