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For Futures Traders the Deck is Stacked

I have heard dozens of traders lament that the market is fixed. They believe the deck is stacked against them.

I have a very different view of the market.

I believe the market is designed to pay you money.

I agree the market is fixed – that the deck is stacked. I believe that the market is stacked in your favor.

In reality, the market is neutral, but, for those traders who do three things, the deck is stacked in their favor.

They consistently execute setups that have an edge; They cut their losses when they are wrong; and They exploit their gains when they are being rewarded.

If you start with an edge in your setups and you cut your losses and let your profits run, then the following is true:

The market is designed to pay you money; A good trade works immediately and profoundly; and Any trade that does not work immediately and profoundly is suspect.

First – in my view of the market, the market is not against you. The market is designed to pay you money, if you just know how to extract the money it is waiting to give you.

Second – a good trade works immediately and profoundly. A good trade should explode in your favor the moment you execute it.

Third – any trade that does not work immediately and profoundly is suspect.

When a trade immediately explodes in the trader’s direction, surprisingly, most traders cannot get out of it fast enough.

They cannot believe their good fortune.

You should view this favorable explosion as the norm and let the market go in your direction until the market either stalls or retraces by a preset amount.

After all, if the market is designed to pay you money, then each trade has the potential to be a home run.

Of course, we know that most trades do not immediately explode in your direction. When faced with a trade that does not move or, worse, drifts against the trader, most traders make excuses for the trade and think of reasons to hold onto it hoping it is still going to work.

You should do just the opposite.

A trade that does not go in your direction should be given the minimum amount of room to work and, if it does not, it should be exited.

After all, each trade is just a small probability.

It is important to keep in mind that when you are in a trade that is not working, you are not able to see the next trade which has a better chance to reward you.

In conclusion, the deck can be stacked in your favor if you just understand that:

The market is designed to pay you money;

A good trade works immediately and profoundly; and

Any trade that does not work immediately and profoundly is suspect.

Wishing you success in your trading, Jeff Quinto

Copyright 2009 by Jeff Quinto All rights reserved


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