In trading there is a factor known to many as the ‘R’ factor or risk factor. Traders determine their average or base risk per trade they’re willing to take and name it ‘R’, and then measure profits as a multiple of this ‘R’. For example, a 3R profitable trade means the trader has made 3 times the amount they risked. The idea is to determine the ‘R’ factor early on in the trading system building stage and keep it consistent, whether it is a fixed dollar amount or a percentage of available capital.

The benefits of using an ‘R’ factor include measurability, especially during back testing, which helps to determine a systems potential, and being able to track your trades from a systematic point of view rather than a monetary point of view. However it is the monetary point of view that I would like to address as I feel there could be another angle or point of view that could aid struggling traders, especially those that find themselves cutting winning trades short (breaking their systems rules).

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The Dimensions of a Successful Trading Entity

Many considerations go into creating and running a successful trading entity. We’ll look at the most popular which get the most attention, right through to the most important, which usually get the least attention.

Here is the list:

1. Entry signals
2. Risk management
3. Exit signals

4. Reliability
5. Reward to Risk
6. Opportunity
7. Capital management

8. Objectives
9. Familiarity with Markets
10. Resources
11. Mindset
12. Style
13. Management

Most, and by most I mean probably close to 80-90% look at number 1 and that is it! That is a startling reality, but a reality nonetheless. But there is a reason this happens. Most new traders are unaware that such a large number of traders ultimately fail in this business, and more importantly, this fact is well known by the very people who market trading in this way.

But enough of that, let’s look at some serious considerations you should make and the order in which you need to do it.

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The index futures trader…

I received an interesting email recently from a 11+ year experienced index futures trader who wanted to know if a particular program would enable him to take his trading to the next level.

At first I wasn’t sure which program he was referring to and also at what level he was trying to get to, let alone which level he was currently at.

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I have spent an awful lot of my personal time putting together a 69 minute video for traders that I believe will open the door to understanding how to trade successfully.

This video is a trading system I call the 4 T’s trading system, and in this video you’ll learn the trading system itself, the rules and how to trade it. It will also show you I apply leverage to it, but more importantly how to use leverage with the trading system to achieve a goal or objective.

However it doesn’t end there. By the time you have watched this movie, I believe you will be able to take any trading system, not just the 4 T’s system and use it to achieve your goals. If you already have what you believe is a work-able system but are unable to make it work, this may answer your problems.

If you do have any questions after watching the video I urge you to send them to me, via the question form link which you’ll also find on my blog. I plan on answering any questions regularly so do send them along.

It is quite long, so make yourself a cuppa and enjoy
http://financialmarketfisherman.com

To your success
Dean Whittingham

What do you make of this chart?

Time to dust off your technical analysis skills and take a look at the following chart, and tell me what you think…

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Did you enter the trade long?

For those of you that haven’t read the first part of this trading quiz, please look back a couple of posts and do so now.

For the rest of you, read on and see what happened next…

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Would you trade this?

Hi everyone, I think it’s time for a little quiz.

Take a look at the chart below, and tell me what (if anything) you would do, and why you’d do it.

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Trends for beginners

Despite trying to keep my posts simple and easy to understand, I’ve been guilty of using jargon without always realising it, and in my recent posts on the 1-2-3 breakout trading system I didn’t make much of an effort to clarify trends.

In this post we are going to rectify that and use some basic technical analysis skills to give you a basic outline of trends.

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What are you going to do now?

This morning I woke up to the news that in the US the Dow had fallen 2.8% (387 points) overnight, along with falls in other markets. The ASX XJO, the Australian top 200 index has lost 3.7% today in a 229 point fall.

Having been a member of a private forum that focussed on put credit spreads, I know there are going to be many traders that will have found the last two weeks of trading particularly stressful.

The posts I dreaded reading from members of that forum time and time again after falls like this can be paraphrased in five words; “What should I do now?”

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1-2-3 breakout system exits

In this post we’ll continue looking at the 1-2-3 breakout trading system by discussing an exit strategy for the long entries we covered last time, as well as looking at short entries and exits

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