There are an infinite number of approaches to e-mini trading but the results fall into 3 general categories, or a combination of the 3 categories. An individual’s approach to trading is shaped by a variety of factors which may include; the trader’s unique personality, level of experience, and the trading methodology employed by the trader. Of course, differing levels of these traits can combine for a highly successful trader or gradations of success/failure. Oddly enough, two of these three variables are completely within a trader’s control. An individual trader’s personality is not usually something than can be changed, though some claim behavior modifications can be affected through training. Behavior modification theory is beyond my level of expertise, to say the least, and is a variable I accept as static.
With that wordy introduction out of the way, suffice it to say that some personality types are typically unsuitable for productive e-mini trading. I generally am quick to spot individuals who fly into an emotional rage, berate themselves, or trade on “a hunch it’s going to move up” and caution them about adopting a more quantitative approach to trading, usually to no avail. These individuals usually view trading as a game of chance rather than an exercise in probability. Both approaches entail the possibility of loss, but trading based upon probability relies upon a pragmatic analysis based approach to trade selection. Trading upon hunches or emotions is a sure way to get you out of the trading business in a hurry
Inexperienced traders often misinterpret or misread their trading charts with disastrous consequences; as losses mount, it is not unusual to see mounting desperation in their e-mini trading decisions and lower probability trades are taken in an effort to restore his/her account to breakeven. I think every trader has experienced this phenomena to some extent and usually the wise trader only engages in this behavior once; lesson learned, don’t do it again. On the other hand, a trader with poor technique will engage in this desperation trading until his/her account needs to be replenished with new funds. Bad decisions based upon lack of experience are painful, but can be remedied with further practice and e-mini trading instruction.
Finally, some traders, regardless of experience level, some traders rely upon a trading system that is not applicable to the type of trading in which they are engaged. I find very few e-mini scalp traders, for example, that can trade Elliot Wave Theory, Gann Lines, or stand-alone Japanese candlestick techniques for short term trading with any level of consistency. This is an e-mini variable that can be easily altered by learning alternative methods to approach short term trading. While these systems may be fine for swing trading or even longer term trading, they lack the dynamic indicators for short term e-mini trading. It’s important to trade real-time indicators and have experience and training in these techniques to be consistently profitable.
The goal in trading is to make money every day and I have outlined some common hindrances to achieving that goal. Trading on a hunch or “a feeling” is gambling, while taking well-thought out set-ups based upon sound technique is trading. As always, best of luck in your trading.