25-Facts on Successful Commodity, Stock & Options Trading

1. 95% of all Commodity Futures, Stock and Options traders are long-term losers

2. The 5% that win will earn the money the 95% lose since commodity futures trading is a zero sum game

3. You must master three disciplines to achieve long-term successful speculation:

*Trading methodology (long or short-term, technical versus fundamental analysis, type of trading system, etc);
*Psychological discipline (controlling emotions of fear, greed and anxiety);
*Money management (risk reword decision analysis for each trading opportunity - when, where, why and how to bet on a particular event)

All three trader disciplines are necessary, but not sufficient individually - only all three combined are necessary and sufficient to achieve futures trading success.

You must develop a trading personality which integrates all three disciplines to achieve long-term success in speculation. If you do not, you will fail.

4. 95% of commodity futures traders concentrate on trading methodology and ignore disciplines two and three. If you only focus on trading methodology and technical analysis, you will eventually fail in speculation. The only question is when you will fail, not if.

5. Psychological problems are caused mainly by uncertainty . . . which creates fear, greed and anxiety.

6. Uncertainty can be significantly reduced if the futures trader has information and knowledge which creates certainty rather than uncertainty. Certainty reduces fear of the unknown, greed, anxiety, and creates confidence and success.

7. 95% of traders are totally disorganized as to analyzing their trading results . . . and have no concept of how to organize their profitable and unprofitable trades.

Practical organization of trading results is a primary prerequisite in mastering the money management discipline.

8. Commodity Broker statements provide absolutely no value or practical use in mastering the three disciplines.

9. To master the money management discipline, the trader requires information which is: a. timely; b. accurate and; c. practical. All three tests are necessary and sufficient. Each individual test is necessary but not sufficient.

10. Futures trading is just like running a business. If you do not approach trading in the manner of a successful business, (such as IBM, Sony or Apple Computers) you will. Probably fail in the long run.

11. All three disciplines are inter-linked. If you make progress in one of the three areas, the other two areas will automatically improve.

12. 95% of all traders play as customers in a casino and not as the casino.

13. You must play as the casino and not as a customer to achieve long-term successful speculation.

14. The customer in the casino will always lose and the casino will always win in the long run.

15. Long-term futures trading success can only be achieved by playing a game with a positive expectation - (or playing a negative expectation game which you expect to become positive - a more risky technique)

23. You should classify any contemplated trade into one of the following five categories before putting on a new trade futures position:

a. Entrance into congestion
b. A trade within a congestion
c. A breakout from a congestion area
d. A trend run
e. Trend reversal