E-mini trading requires a number of different components to be clicking on all cylinders in order for a trader to be profitable. Everything has to be just right to get the maximum amount of profits out of the market. Unfortunately, there are some days when things just won't go your way. The quicker you realize that you shouldn't be trading the better off you will be.
Successful e-mini trading is about following a game plan and exploiting your edges in the market. A trader needs to plan for the good times and the bad times. When bad times appear they need to have a definable list of variables that will keep them out of the market and stop them from irrational trading. Every trader knows there is nothing more dangerous then a vengeful trade.
So what sort of variables should you constantly monitor so that you don't have to worry about over trading and revenge trading?
1. How Many Trades Do You Take?
A trader should know based off of past performance how many trades they should be taking per day. Each style of trading requires a different number but you should be aware of your profitable patterns. Look back at your past results and come up with a daily trade limit. One of the first signs that you need to pull yourself away from the market and allow yourself time to cool off is over trading.
2. Daily Loss Limit
E-mini futures are so highly leveraged that one bad trade can wipe out an entire account if a trader isn't careful. Make sure you have a daily loss limit set and stick to it. If you don't trust yourself call your broker and have them place a daily loss limit on your account. No good comes from being down large in the morning and trying to make it all back by the afternoon. The market will be there tomorrow. A good trader recognizes that and waits for their set ups.
3. Trading Hours
Set your work hours and don't trade outside of them. If you find yourself extending a down day and trading into your no trade zone that will serve as a clue that you need to stop. In your trading plan you should have set your working hours for a reason and you need to follow your plan if you are going to be successful.
Monitoring these aspects of your e-mini trading can help you prevent an account blow out before it happens by keeping your emotions in check. The key to successful trading and proper money management is following your rules and being disciplined enough to wait for your edge in the market. This checklist will help you by making sure you are acting in your best interest each and every trade.