I mentioned in my last post on the topic that Ugly took a hit trying out futures. Now, it looks like Phileo caught “futures fever” and took a bigger loss than he wanted.
Phileo’s smart, and will recover stronger for it. In a way, this is the best outcome when you lose sight of proper risk management (which has happened to all of us at least once in our careers). Imagine what might have happened had the trades gone his way… He might have made a big happy post about how he made. — oh, let’s say… — $8k in a day, and kept on placing bets that were too big for his risk appetite.
So, please, everyone, be careful when jumping into a new, zero-sum, high-leverage game. To some degree, trading is trading. But, ask yourself, are you rushing to futures because you have visions of huge, easy gains in your head? Maybe wait until you’ve calmed down a bit. You need a level head in any market! I’m not saying, “don’t try futures”… I plan to add them to my trading in the next couple years, in fact. Just don’t try them because you are excited about money money money.
On the positive side of the coin, I should point out that CalTrader made an excellent post about one of the types of plays he likes to make. I hope he makes more posts like this, and in particular I would like to hear about in-trade management.
December 23rd, 2006 at 10:00 am
you make a great point about keeping a level head when trading anything
btw, were u in tampa recently? i know that u won’t date a woman who goes to church, but if this was u, u are taking your beliefs entirely too far
is this the same richard todd?
http://www.tboblogs.com/index.php/newswire/story/suspect-in-church-burglaries-arrested/
December 23rd, 2006 at 10:32 am
Richard, you have been working hard enough to advise ppl who are rushing to trade futures. But, sometimes, for some people, losing money is the easiest way to learn something from market.
I guess the same rules applied to options/futures trade who are thinking to switch to day trade stocks for whatever reason.
Merry Christmas.
December 24th, 2006 at 1:34 am
@john: since I don’t trade futures and my ads don’t support me, I had to do something to make ends meet. :-) I figured if God didn’t want me to take that stuff, he would go all pillar-of-salt on me, or something. And, really, if God was fine with it, who are the police to judge?
@gav, yeah… some people are going to learn the hard way, no matter what. And, you are right, switching to stocks is also something to be careful about, but at least in that case you wouldn’t have so much new leverage tempting you.
December 24th, 2006 at 8:39 am
richard: lol
December 24th, 2006 at 10:40 pm
I’m definately going to start a “live trading session” video series starting next year. Should be interesting to see how far I can go with this new $5k account demonstration. The guy over at Emini Trading turned $10k into $55k in about a week, that’ around a nice 500% return which could only be provided by 1 of two tools, options or futures. It’s exciting, but only when you know what you’re doing. In an example I heard from an options trading seminar I attending, it can be like giving a 16 year old kid, keys to a new Ferrari.
December 25th, 2006 at 5:16 am
@cal: a video series would be great.