E-mini Trading: Top 3 Reasons Traders Fail
The financial markets are not an easy place to make a living
. They thrive on inexperience and misinformation. Novice traders with limited market knowledge act as permanent ATMs for the big institutional traders ever present in today's electronic markets. In the end the majority of retail day traders lose for exactly the same reasons.A successful trader has the ability to recognize the advantage that he or she holds over other market participants and is able to exploit that edge in order to pull consistent profits. Knowing your strengths and weaknesses allows you, as a trader, to confront certain issues in your trading before they start to affect your bottom line. Let's take a look at some of the common mistakes retail traders make in the markets so that we can analyse our own trading to see if there is something we need to change.
1. Lack of Capital
In today's modern electronic market trading is getting more and more economical, however, it still takes money to make money. You can't expect to make a full time living from trading off of a $5,000 account. Far too many novice traders take on too much risk and wipe their accounts out before they are able to pick up any real experience. Do yourself a favour and start small. Set aside enough capital to allow yourself time in the markets. Success is not going to happen overnight and you need to protect yourself and your future career by giving yourself enough time to develop your live trading skills.
2. No Clear Trading Strategy
A quick search online will produce hundreds if not thousands of different trading strategies. 99.9% of them won't work but at least they are a starting point. Countless traders have been traded out of the market for not having a clear cut trading strategy. You have to know exactly where your edges lie in the e-mini markets in order to consistently make money. Define your trading strategy before you start. When you are just beginning make sure you stick to your plan. Limit yourself to only one or two trade set ups. Doing so will keep you from over trading and getting eaten up by heavy commissions. In the end, you can't succeed without a well-defined strategy.
3. Uneducated About Price Action and Market Behaviour
The vast majority of traders who fail do so because they didn't understand how the markets operate or how to spot a good set up. You can save yourself an enormous amount of time and energy by seeking out experienced traders who will educate you on market behaviour. Don't limit yourself to one individual. Get out there and find the trading coach or system that best fits your personality. Take the time to learn the pros and cons of each trader's style and then incorporate the good into your own strategy.
To become successful at e-mini trading you need a combination of skills. These skills are developed inside the markets and in order to ensure you have the opportunity to become the best that you can be you need to follow these three tips and set yourself up for success before you start. Starting off on the right foot will help you speed up the learning curve and get you on your way to profitable e-mini trading.
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