Are you guys aware that only 5% of futures traders are consistently earning money in the market? The 95% is traders like everyone else that keeps blowing their account and losing their money. People think that market analysis and intelligence can be the key to becoming part of the 5% of consistent winners but it is not the defining factor. Most traders think that their strategy is wrong without knowing that the determining factor is the winners think differently from everyone else. So, it means that psychology is the most essential thing if we want to become part of the 5% or the winners. There are 2 groups of traders, 1st is the consistent winners and 2nd is everyone else. We have options on what group should we belong to. These are the factors on how can we become consistent winners:
1. Psychological – Trading is inherently risky; futures traders should be aware that no trade has a guaranteed outcome. When you put a trade, you are correspondingly accepting the risk but that’s where the problem comes in. All of the traders are taking the risk but are they accepting that the trade has a non-guaranteed outcome? The answer is No. Consistent traders are aware that there is no sure profit or magic in trading. They embrace the risk where if they lose, it is okay for them because they know that there is no guaranteed outcome.
2. Trading system – The trading system is considered the blueprint of your trading journey; all of your strategies and steps belong to the trading system. You can create your own system but you can also buy or learn from someone to lessen the curve of learning. There is a lot of trading system online and you choose a system that is you fit your preferences, habits, and lifestyle.
3. Risk management – The reason why people blow their futures account in less than a year is that they have poor risk management. Always remember that it is not about how much money you make, but it is about how much money you don’t lose. Risk management helps us trader's accounts from losing all of our money. Through risk management, we can know if the trade is worth it or not.