Pivots, Patterns, and Intraday Swing Trades: Derivatives Analysis with the E-mini and Russell Futures Contracts, + Website

CHAPTER 18

The Trade Plan

Most of the time and money expended on trading education is in pursuit of better technical tools. The less successful trader wants to know the more successful trader's methods. He believes that if only he too can learn the tricks of the better trader, he will become more profitable and be free of the seemingly insurmountable challenge presented in mastering the markets. And yet, the glaring reality in the world of trading education shows a very low success rate to the transfer of skills. Furthermore, of those within the trading community known for their success, none seem to use the same methods. So then, some other factor must be in play.

The statistics of losers to winners in the world of trading is not encouraging. Some industry studies track the opening of commodity futures accounts and note that nearly 90 percent of them fail to sustain enough profit to remain open after even one year of trading. It's highly likely then that those percentages also apply to the audience of this book. And I believe I know why. Over some 30 years' experience as a broker, a mentor, an educator, an analyst, a speaker, a trader, and an author I can attest to the fact that the majority of those I've worked with simply do not trade with a plan, nor have ever even constructed one.

When I first begin to mentor a trader, the subject comes quickly to what he or she knows and looks at in order to follow and interpret market action. But when I ask to see the specific document ...