You may be surprised to hear that many profitable futures speculators have success rates between 30% - 50%. Futures traders are successful because their successful trades outweigh their unsuccessful trades, not because they are great predictors of the market. The one guarantee of trading is that you will lose money.
This makes psychology a huge part of trading. Futures market professionals achieve success in this environment by controlling risk with money management rules. Most futures traders want to be right, not control risk; because controlling risk goes against our nature as human beings. Many of my clients first come to me in search of the holy grail, they want the perfect entry and perfect indicator.
The reality is that it does not matter what market you are trading in, there is no perfect setup, or indicator, or system. As traders we can only control certain things, and we must focus on them. One of these is strong money management rules. With this you will be able to control the two rules of trading: let your profits run, and cut your losses short.
Many traders blow up their accounts, because they do not adhere to these two important rules. Strict money management will keep you from ending up in the poor house. Also, not having rules brings a lot of uncertainty into the equation. The brain does not like uncertainty and tends to get a bit erratic when faced with it.
A lot of new traders see books where people took two thousand dollars and built it into millions of dollars, and think it is easy. If they can do it why can't I. Well the real reason is that you have pie in the sky ideas, and they do not. I need to be frank, because a lot of new traders have this false reality.
A successful futures trader does not put all of their focus on a trading system or a trading method. A successful futures trader first focuses on themselves and money management or risk management, I look at these last two as basically the same. If you can manage money then you should be able to manage risk as well in my opinion.
Basically, a lot of people come into trading with baggage from other industries. Trading is not the same everyday, it is not learn a series of steps and repeat them until the bell rings. Trading is an intellectual game, and only the strong survive.
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