Good Afternoon,

One of the things I think that is imperative for a new trader (or any trader for that matter) to do is spend time every day/week going over the day’s/week’s  trading action. It is only by doing this simple, but mundane task that allows a trader to identify weaknesses in his/her trading techniques and mental toughness. Yes, I said mental toughness. With all of the many distractions in our daily trading world, it is easy to let small news stories or worldly events skew our take on how we trade. Therefore, the only way to counteract those influences is to constantly evaluate the performance of how we are trading.

We had a good trading week. There were 24 valid trades. There were 20 winning trades, 2 trades broke even  and there were 2 losing trades. This is pretty representative of the break down of trades that most traders get using the strategies outlined in the report “How To Make $12,000 A Month On A $5,000 account.” Since my objective on each trade is 2 points and my stop loss on each trade is 2 points, you can calculate how much my strategies would have made last week if you took all trades. Each point on the Russell 2000 is worth $100. There were 20 winning trades. 20 times 2 points = 40 winning points. 40 times $100 (the value if each Russell 2000 point) = $4,000.  There were 2 break even trades. Once a trade is up a minimum of 1.50 points without making the objective, the stop is moved to break even (the price the trade was entered). A side note about break-even trades. There were 2 times this week that a trade was up 1.9 points and the trade broke even (1 tick below the objective for the trade). This is very frustrating, but both these trades turned around and would have stopped out for the  full 2 points stop loss if I had not moved the stop to break even. Those trades that are up alot and get stopped out for a full 2 point loss are very hard for a trader to mentally recover from. I once knew a trader who referred to that as  psychological capital. Psychological capital is a term used to describe how your mind reacts to how your trades preform. If you are up almost 2 points (almost $200) and end up losing 2 points ($200), that trade takes a toll and uses up some of your much needed psychological capital. In many ways, preserving your psychological capital is as important as preserving your REAL capital. It lets you take trades more confidently. You might want look for the report “Psychological Capital - A Traders Best Friend” on my blog under the archives tab.

There were 2 losses. As I said, the stop loss is 2 points. 2 losses times 2 points times $100 per point = $400 loss. So for the week, the winning trades were up $4,000. The 2 break-even trades cost nothing except the cost of any commission and slippage and the 1 losing trade lost $400. So the  strategies I use were up a net $3,600 for the week. As I have discussed in other articles, the margin requirement I feel comfortable with for 1 contract is $5,000. So if you were trading a $5,000 account and made $3,600, you would have a very nice return. Can that be done? Absolutely! If you are just starting out, it may take you some serious screen time to get to that level. The only way to get to that level is to read as much as you can and watch to see how the market reach to various scenarios. To  get the FREE article “How To Make $12,000 A Month On A $5,000 Account” log onto my blog at http://futuresinvestingmadeeasy.com and sign up for the FREE report in the upper right hand corner. You will also get my daily updates with charts the actual trade set-ups that happened that day. Using these reports will ultimately help you to catch a whopper!

Regards,

Ron