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BY MICHAEL RADKAY

Would you ever fly a plane without checking the gas gauge before take-off?

Would you ever fly a plane without knowing how to fly?

Steph and I went on a private plane not long ago and the pilot (our friend) gave us the checklist of things to do before take-off. He let us read off each step while he tested all of the key parts on the plane. Yes, this included checking the gas gauge. We were so relieved with the way he approached the pre-flight with us because we got a chance to see the steps he took. The pilot was able to check what he needed to check and at the same time he made us feel comfortable before getting into the plane with him as we went through the list successfully together. I don’t think anybody, passenger or pilot would like to go fly without checking the equipment and most important of all know how to fly the plane.

I bring up this point and relate it to trading because flying and trading have some similarities. You are the pilot in trading. It is 100% on you. No free rides in the passenger seat if you choose to push the buttons yourself. Mistakes in trading wont kill you literally but financially not knowing how to use the equipment let alone checking the equipment before using it can mean financial suicide. It surprises me so often that traders that come to us for help don’t even know how to use the equipment that well and have been trading and losing real money and quite often big money!! This is equivalent to taking off in a plane, not knowing if the plane works and on top of that not knowing how to fly. People often think; its just buying and selling, prices go up and down, how hard can it be, right?

When I routinely work with clients one on one I screen share with them and begin to teach them not only how to apply a strategy but I especially begin to focus on teaching how to use the software to implement the plan. I might even out of know where throw a curve ball at a student when we are on a practice account. I get the student short the US Dollar as its been great play to short the US dollar with low interest rates and debt piling up out of control (nothing new). We will be humming along and all of a sudden without warning I say the Fed just raised the rate, what are you going to do? Your mind might say the right thing, but as you try and cover the short as prices begin to soar your hands don’t know where to turn because you don’t know how to do it under pressure.

You might have the best trading strategy in the world in your head but don’t go into the fight without knowing how to use the equipment that is necessary to make it successful. It surprises me all of the time the low scores people give themselves when I ask the audience to rate their knowledge and confidence of using the software needed to trade.  I have been putting on trades on the computer everyday using software for the last 9 years. In the beginning I made mistakes and donated unnecessary dollars to the man living inside of my computer but my goal was to control the controllable so I can free my mind to think clearly under pressure. There are enough uncontrollable things that can happen in the market  so begin to fix and master what is in your control and do it now while your account is intact.

So often new traders go on a practice account and try to make money day one. We feel this is the wrong approach at first. Begin to push “All” of the buttons on the software and become familiar with what they do and how you might be able to use them in your approach.  Learn to ride the bike so to speak before doing wheelies and riding no-hands. After you get familiar with the software then begin to create scenarios and see how fast and accurately you can act when turbulence hits (i.e pushing buttons several times and realizing you compounded the problem several times out of nervousness in the moment and in a full fledged panic you kicked the chord out of the socket killing the power on your computer and not knowing where the phone number is to call in case of emergency;  just to name a few that cost some thousands).  Be careful when opening the overhead bin as baggage may have shifted during flight :) As you become a master using the software then implement your strategy to trade with live money. How long this all takes is up to you!!

Whatever you decide to try; you can’t win, if you don’t play!! Prosperity is at your fingertips! All you have to do is grab it!!

Trading Commodity Futures and Foreign Currency (Forex) contracts may not be suitable for all investors. You may lose a substantial amount of money in a very short period of time. The amount you may lose is potentially unlimited and can exceed the amount you originally deposit with your FCM. The material on this website is intended for educational purposes only.

© 2011 RDS Trader, LLC.  Have a specific topic you want to read an article on, email us your requests! info@rdstrader.com

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