The Four Biggest Mistakes By Stock & Futures Traders – Part II
Chris Vermeulen | Dec 20, 2013 02:42AM ET
This part two of a five part series of the four biggest mistakes traders and investors make which costs them time, money and usually self-confidence when trading stocks, ETF’s or futures trading strategies.
The Four Biggest Mistakes
1. automated futures trading systems have become so popular. Having system (mechanical trading system) can eliminate a vast majority of emotional and psychological issue us as humans struggle with.
Using To Much Leverage Trading Conclusion:
In short, if your trades will typically have a drawdown of say 20%, then you must be sure your account has enough money to be able to enter the same size position after lose 20% or your account. If you will not have enough money left to keep trading then either adjust your strategy or deposit more capital.
To get a solid feeling of how leverage works I suggest spending 20 minutes and play with a calculator and play with the potential gains or losses using various leveraged instruments like the 1x, 2x, 3x exchanged traded funds, and also futures contracts like the ES mini which is $12.50 per tick, or $50 per point.
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Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
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