I know that sounds impossible... and let me be clear... I'm not saying that you'll never experience losing trades, what I am saying is that in the long run unprofitable futures trading can be sidestepped if traders would simply adhere to two simple trading rules:



1 - Have sufficient trading capital

2 - Use (and never abandon) stoploss orders

First, start with enough capital. You don't need tons of money to begin trading futures successfully, but you do need some. Here's a quick guideline for trading capital - always have at least enough trading capital to cover 10 times the amount of money that you are willing to risk on an average trade.

So if you normally risk $500 per trade, then you should have a minimum of $5,000 of capital on hand. If on average you expect to riskcloser to $1,000 per trade, then you having $10,000 in trading capital is recommended.

Here's another method of calculation - your total potential loss on three straight losing trades should be equal to no more than one-third of your total trading capital. For example: If you're going to risk an average of $1,000 per trade, then three straight losing trades would amount to a loss of approximately $3,000... therefore, your total starting stake should be at least $9,000 - $10,000.

That brings us to a very key point - you will have losing trades. Trading is risky. I've never met anyone who has a perfect track record. But what makes futures trading great is that you don't need to be 100% correct to be successful - you can earn a fortune even if you're wrong more than you're right... if you know how to manage your risk.

That brings us to our 2nd point - Always use stoploss orders. Now I don't have any actual stats to back me up here, but from my own trading results, as well as from those I've witnessed from clients and peers, I'd wager that 90% of accounts were wiped out because someone "fell in love with" a trade, and instead of taking a calculated loss, people pulled their stoploss, and stayed in a trade hoping it would eventually go their way... unfortunately this usually ended bankrupting their trading account.

It's happened all too often, That's why I have a simple rule... Never cancel a stoploss order. Never. Got it? It's as simple as that. I've seen it over and over... Whenever the market is close to stopping anyone out, they can come up with loads of "reasons" to cancel or move their stop. That would be fine except these are never good reasons - they just appear to be at the time. Expect and take your losses... the best time is when they're cheap. This isn't about being right or wrong, it's about profitable trading.