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The Four Biggest Mistakes in Futures Trading (Trade Secrets Series) Book

The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)
The Four Biggest Mistakes in Futures Trading (Trade Secrets Series), 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, The Four Biggest Mistakes in Futures Trading (Trade Secrets Series) has a rating of 4 stars
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The Four Biggest Mistakes in Futures Trading (Trade Secrets Series), 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, The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)
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  • The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)
  • Written by author Jay Kaeppel
  • Published by Marketplace Books, March 2000
  • "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
  • This 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 Bigg
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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


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The Four Biggest Mistakes in Futures Trading (Trade Secrets Series), 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, The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)

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The Four Biggest Mistakes in Futures Trading (Trade Secrets Series), 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, The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)

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The Four Biggest Mistakes in Futures Trading (Trade Secrets Series), 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, The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)

The Four Biggest Mistakes in Futures Trading (Trade Secrets Series)

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