Winning at the Futures game can be accomplished only through sound, objective and disciplined money management and solid fundamentals. Perhaps this man, to his credit, may have become efficient with the application of a particular technical indicator, but that alone will not make a fortune. Technical analysis used to reinforce the historical seasonal tendencies of a commodity is not only forgivable but is necessary. It is, however, just one element in a sound approach to trading the markets. More so, he sets his limit stops based on his account balance.
Experience is the best teacher.
Our second trader will learn very quickly how to anticipate profitable moves, and more importantly, because of his sound money management he will actually be around long enough to profit from his knowledge. This statistic, however, includes those traders who are in the game for one or two months. I ll just take a few thousand and see how I do. Of course not. This means that even if you are right in picking the direction of a market, you are likely to be stopped out within seconds with a stop loss that low.