Jeremy Schoemaker: Why I need to win!

My kids are hungry and they need new shoes!

S&P Stock Futures: Virtual Trading is Like Eating a Virtual Steak.

Virtual Trading accounts are great – for practice.  However, if you think that trading with “play” money versus trading with your own cash is the same then I have some ocean front property in Kansas that I’d like to sell you (it also comes with a bridge).

Harsh sounding, isn’t it?

Virtual trading accounts (also known as “paper trading”) can be very beneficial if you are using them for training purposes such as placing orders (with stops and limits), setting up your charts, back-testing using historical data, trying new indicators or even learning to take a small loss instead of letting it become a big loss.

There are a plethora of companies that will offer you free practice accounts including OptionsXpress, United Futures, FX Solutions and Go Futures and many include free charting and data services.  Often those trading accounts come preset with accounts “worth” $25,000 – $50,000 dollars.  Wow!  Suddenly you are rich – and reckless because if you have a bad day of trading. You merely “reset” the account to the original account balances and voila! your losses have disappeared and your account has suddenly been replenished.  So who cares what happens to the trade or how many contracts you bought/sold or how many points you’ve risked.

Remember that all brokers will make a commission on every contract you buy or sell – whether your trade is a winner or a loser.  It makes no difference to them how much you win or lose as trading the ES index futures is a net sum game which means that for every winner there’s a loser.  Your loss is another trader’s gain.

What difference does it make if you have no real financial risks?  Plenty. Primarily you may be developing a false sense of security or worse; a false sense of success. See, you never have to deal with the reality of taking a loss, or watching the trade bounce back and forth between profitability or loss, or knee-jerking or panicking and reversing your position only to have the trade go back in the direction of your original trade.  Oh my. There are so many things that can happen to your psyche during the heat of the battle.  And, believe me it is a battle. Its a real life win or lose battle and its crazy and hectic and can be very stressful or matter how good of a trade you think it is.

I trade the S&P E-minis where every point is worth $50.  My trades generally consist of three (3) contracts and are placed with a stop loss of 4 points. My maximum potential loss is 12 points which in real dollars is $600 + round trip commissions ( 12 x $50 + $15 commissions = $615).  If the trade goes against me I’m out $615 “real dollars” – on a single trade. Ouch.  And what worse is that I don’t get to reset my account back at the end of the day.  Believe me, I am no big time trader and losing $615 hurts.

A few suggestions:

1. Open a virtual trading account and practice placing trade – according to your trading plan.
2. Never place a trade without a written trading plan that defines order entry and exit, profit objective and stop loss limits.
3. Before you ever place your first real dollar trade read Mark Douglas’ book  The Disciplined Trader: Developing Winning Attitudes.
4. Take some courses to learn how to trade somebody’s program or “system” so you can develop your own edge. Ryan Watts has a $67 course that includes a free daily live trading room moderated by followers of his. You can get more information about Ryan by going here: Watts Trading.
5. When you set up your paper trading account set the balance to be the “Exact” same amount you plan on trading with real dollars. Don’t make the psychological mistake of trading a $50,000 virtual account where a $1,000 loss is only 2% of the account value. If you listen to the brokers who tell you only need $5,000 to start and you lose a $1,000 on a single trade you’ve just loss 20% of your account!
6. Take your time, learn something new everyday, be patient with yourself and your trades.

Trading The ES: Increasing Prosperity

Increasing Prosperity With Positive Thinking

Increasing prosperity in our lives can be accomplished by having the right frame of mind. The truth is, our thoughts are very powerful. They are capable of influencing every aspect of our daily lives, from our physical health to our social behaviors. I’m sure you’ve heard the adage, “As you think, so shall you be.”

If we want to improve our lives, we must first improve our thoughts. Harnessing the power of thought in a positive way has the ability to create great change in our lives, including our financial well-being and prosperity. But how? How do we take something as intangible as thoughts, and manifest them into a physical reality?

We must first understand that being prosperous is more than having a lot of money. Prosperity is a mindset, a way of interacting in our lives, and a way of thinking. Mastering this train of thought is not easy, but it is simple enough if we keep working on it consistently.

Following are some ideas to help you improve your thoughts, and ultimately attract more prosperity into your life:

Be grateful for the blessings in your life right now. Take a few minutes each day to express heartfelt gratitude for the good things in your life. Even more powerful, write a few of these blessings down each day. This helps to put your focus in the right direction — on abundance, not lack.

Use positive affirmations to begin training yourself to think positively. Use “I am” statements such as “I am worthy of all that is good.” Write the statements down and repeat them nightly before bed. Over time, this will implant these thoughts into your subconscious mind, and you will begin to naturally believe them.

Creative visualization can help you achieve prosperity by determining what it is you wish to achieve, and then thoroughly creating that image in your mind. This works in the same way affirmations do. Our subconscious will fill with images of prosperity, and eventually these subconscious “truths” will manifest in the physical. “See” yourself as being prosperous, and you will become so.

Encourage yourself with the belief that you can achieve great things. This could also be one of your affirmations, but expand on it. If you know you can earn a certain salary, tell yourself you can earn more. Allow yourself to believe all things are possible, and you will gain the confidence needed to reach higher than you ever imagined you could. If you believe you can do it, you are more likely to take the risks associated with people who are highly successful. Prosperity and success go hand in hand, so take risks and aim higher.

Start a savings account. As strange as it sounds, think about this: Like Attracts Like. Even if you can only afford to put a few dollars into your account every month, it will begin to build up and attract more money.

Finally, believe you are already wealthy. The creative ability of our thoughts is such that we lend more power and energy to whatever we consistently focus on. Focusing on lack will create more lack. Focusing on wealth and prosperity will create . . . guess what?

Remember that this is a process. You likely won’t change your circumstances in one day. But over time, with consistent focus, your thoughts will begin to attract what you want. Once you master this power of thought, there are truly no limits to what you can create!

Ryan Watts Emini Trading Program Review

Watts Trading

I started trading index futures back in 2004. My first year trading the ES (S&P E-mini) contracts was a long year for me as I was essentially gambling and I am a terrible gambler.

Fortunately,  in 2005 I stumbled upon Ryan Watts and his Scalping the E-mini Futures & Forex program.  I can not begin to tell you what an eye-opening experience it was for me.  If only this program was known to me in 2004 it would have saved $1,000’s of my hard-earned dollars.

Having personally traded using Ryan Watts’ day trading system I think I can give a fairly non-biased review.  Mr. Watts is a trader first and a teacher second and he uses these techniques everyday to scalp the ES (e-mini S&P), the YM (e-mini Dow) and he also trades the foreign exchange market (Forex).  What you get with the Watts Trading consists of three parts, first being the e-book with charts examples and setups, second being the progressive flow exercises, and last but definitely not least you get lifetime access to the live trading room.

* The e-book gives you a detailed look at the mechanics of his process, the steps used to prepare for each trading day, and an outline that will help you stay focused in the work of your trading. All of the tools that Ryan makes use of are shown in the e-book with detailed information on each.

* What you get with the progressive flow exercises is a detailed step by step process that you will use to progress as a trader. Traders ought to gradually progress as their skills improve and that is what these exercises are all about. You can move along at your own pace and build the confidence you require to succeed.

There’s also lots of other useful pages on the Watts Trading Group page on yahoo groups. Chart templates are provided there as well which makes things much faster when you go to setup your charts. There’s also some .pdfs that helped me tweak my charts and make minor adjustments in my order entry.  There are also suggestions from fellow traders from the trading room who like to share their knowledge as well and will lend a hand, too.  One document that I found particularly useful was Mr. Watts’ explanation of the stages of cost action. It was great to see the way that he views the market and what cost action is all about.

I highly recommend Watts Trading for someone who desires a nice scalping strategy whether it be for Forex or index futures.

When I first bought the program and starting to use it, I found the live trading room the very useful. Mr. Watts is trading this exact process everyday so you can see his live charts as well, which is helpful to see some real-life example trades. In the event you need any assistance or have questions he has always provided it and will show you what criteria to use to take trades or pass on them.

Mr. Watts will also answer any questions you have about his trading process if he is in the trading room or always by e-mail. This is what helped me recover from a funk and make serious strides as a trader. Do not expect Mr. Watts to give calls because it is not a calling room, but will go over his trades after the fact. Trading the same market as Mr. Watts and when I took the same trade as him it helped boost my confidence.

Once you learn to trust yourself and the indicators (signals), you will find trading profitably and consistently a reality.

You can get more information by going to Watts Trading.

May your next trade be profitable.

Trading the ES: I Believe

Trading index futures can be very demanding as well as mentally, physically and financially challenging . One of my favorite quotes of all times is attributed to Henry Ford and I believe that it is applicable to every endeavor you may choose to pursue.

“Think you can. Think you can’t. Either way you are right.”

Trading profitably & consistently requires a unique state of mind with a strong belief in yourself and your proven “edge” for trading signals. Reading the “I Believe” statements below is part of my daily preparation for doing battle in the markets. Notice I said “in” and not “with” the markets. It is not the market that I trade against but rather the 10’s of 1000’s of other traders that make up the “market”.

I BELIEVE…

I believe I am a successful trader.

I believe I can achieve excellent results in my trading.

I believe I can find and execute winning trades.

I believe I can trade with confidence.

I believe I can trade effortlessly and automatically.

I believe each day’s performance is fresh.

I believe I am personally responsible for all my trading results.

I believe I can be successful without being perfect.

I believe my performance as a trader does not reflect on my self-worth.

I believe one bad trade is just that.

I believe trading is a process.

I believe that by believing in myself and in my proved methodology, and by approaching trading each day with a fresh, positive state of mind, I possess the ultimate trading edge.

Please feel free to add your thoughts and ideas about your beliefs about yourself and your preparation for the trading day.

May your next trade be profitable.

Michael

Candlestick Trading Forum: Ask the Experts Section

What about candlesticks? If you are not familiar with Stephen W. Bigalow or his books on Candlestick trading techniques I highly encourage you to stop by and visit his website at .

In addition to his popular books on “Profitable Candlestick Trading” and “High Profit Candlestick Patterns“, Steve has many articles featured in “Future’s Magazine”, “Stocks & Commodities”, “Trader’s World”, London’s “Morning Star”, and other investment publications.

Refer to his pages often to enhance your education on the art and science of using Japanese Candlesticks to trade effectively.

Sign up for his free newsletters. Additionally, Steve offers a free trading seminar most Thursday nights where he reviews various markets and discusses candlestick pattern setups for trades.

For some great information visit his Ask the Experts section of his very informative website.

May your next trade be profitable!

Discipline: Trading the ES Mini Contract

Discipline. I keep coming back to this topic as I am constantly reminded by the market that it will eat me alive if I fail to follow my trading rules. Mind you, as capricious as the markets can be, even if you do everything “right” you are never guaranteed a winning trade.

It has taken me several years to develop my rules for trading the S&P 500 Mini futures contracts and I have had a lot of help along the way.

Developing that discipline has been the greatest challenge for me and I quickly found out that I needed guidance and a firm base to establish my rules, which indicators to use and most importantly, when and how to place my trades.

I started Scalping e-mini contracts and I have grown to love this method of trading futures. When I first started I found Ryan Watts’ system designed specifically for scalping e-minis, and while I’m only trading the ES offers a “system” that can be used for scalping both e-mini contracts and Forex. I have been in contact with Ryan on a number of occasions and he is ever helpful and cares about his clients. I’d recommend starting with Ryan’s program as it is specialized for a specific methodology of e-mini trading. You can find the program here at Watts Trading Group.

If you want to start learning like I did, nothing is better than a live e-mini trading room to learn with beginning and other more experienced traders. The moderator I followed also primarily traded the ES while others traded the DOW YM. Although we traded two different contracts, the fundamentals were the same. More information about the various e-mini contracts can be found at the CBOT and the CME websites.

May your next trade be profitable.

S&P 500 E-mini Futures Contract

The S & P E-Mini Futures Contract

First introduced by the Chicago Mercantile Exchange, the S&P 500 E-mini is identified by the two letter identifier, ES. The ES E-mini contract expires four times per calendar year: March, June, September and December. Depending on which month an individual contract expires, once the contract reaches it’s expiration, it ceases to have any value. All futures contracts will eventually lose all of their value, unlike stocks.

Each one of the four expiration months has it’s own unique letter to identify the expiry month. March is identified by the letter H, June is M, September is U and December is Z.

The year of expiration is also included in the identifier. For example, if a S&P E-mini contract were set to expire in December of 2011, the symbol would be ESZ11. ES to identify the type of contract, (S&P E-mini), the year (2011) and the month of expiration (December). The ES E-mini trades in quarter points with each quarter point worth $12.50 with one full point worth fifty dollars.

The E-Mini S&P 500 contracts provide an exciting, highly versatile, efficient, and economical means of capitalizing on the daily swings in stocks. In day trading the E-Mini contracts, traders can focus on an entire basket of stocks at a fraction of the cost of commissions and avoid the expense of trading many individual stocks. At the same time, traders can capitalize on both rising and falling markets. And, with online futures trading, you can trade through the Internet and receive your fill prices back in seconds. In day trading, you know exactly where you stand at the end of each day without the risk inherent in holding positions overnight. When day trading, each day represents a whole new world of opportunity!

Index Futures: HOPE is Not a Technical Indicator

Have you ever been in a trade that went against you yet you stayed in even though your trading rules are screaming “get out”?

I know I have and it usually didn’t end well for me. During the trade I kept saying to myself “I hope it doesn’t go any lower, or I hope it doesn’t go any higher!” Yet, it usually does.

If you are an experienced trader, can you count the mistakes I’ve already made on this trade?

1. Not having clearly defined profit or loss objectives.
2. Entering a trade without accompanying Stop or Limit orders.
3. Being emotionally attached to a trade.
4. Holding onto a losing position in “Hoping” it comes back.

Seemingly, we humans have an innate need to be right – always. This need to be right can be fatal in the business of trading index futures because the market is neither right nor wrong – it just is.

For me, it is all about self-mastery i.e., self-discipline.

It doesn’t matter what the rules are if you don’t follow them (or have them defined).

May your next trade be profitable!

Emini Index Futures: Marshall Jones’ Simple-as-123

If you are not acquainted with Marshall J. Jones’ work on trading index futures then I have a real treat for you. Although Marsh passed away several years ago after losing the fight with cancer he is memorialized by his work and approaches to trading in his emini trading manuscript called Simple As 123.

Though incomplete, it is filled with nuggets of insight into the movement and timing of markets as well as some aspects of the psychology of trading. As part of his legacy, his manuscript is available for Free and you can read it by going to

One of the best takeaways was his notion of “The 10:30 am Hop or Flop” where the market has a tendency to either confirm the trend or identify a reversal. It is uncanny how often you can make this observation and be accurate. By no means is this intended to be an indicator but rather one more tool to give you an edge in your day trading.

Marsh’s work, a 95 page e-book though while simple in its approach still requires you to be disciplined and take your trades only when all your criteria for making a trade have been met.

He worked so hard and wanted to share his knowledge as much so that he gave everything away for free. He would regularly host live training seminars and freely answer everybody’s questions with patience and kindness even while undergoing treatment for his cancer.

I am a great believer in learning something new every day that helps me to be a better, more successful while trading the ES emini contracts. And, I am particularly fond of any information I can get free of charge. Don’t get me wrong, I know that most offerings out there cost a small fortune and several of them are worth the price, but I rarely buy anything from anybody who isn’t willing to give away some of his/her knowledge first. The great ones with good to great ideas will usually share 50% or more of their work for free and once you find value in their work, they believe it will be worth the money to you to get their complete approach, trading plan, indicator, etc.

Do a few Internet searches for Marshall J. Jones and you will be pleasantly surprised by the amount of information that he continues to share as part of his legacy.

This free e-book might be one of the best gifts you will ever receive.

May your next trade be profitable!

Michael P. Williams