Yes, chef: Perfecting your futures trading plan recipe

While traders might appreciate a handbook on how to trade and when, there is no exact science, or formula, for a successful trader. However, you can create a “recipe” that works for you.

So, when trading coaches and professionals explain ‘trading success’, they typically do so in terms of creating an ‘edge’ or advantage. It all starts with preparation. One analogy used recently by Jose Blasco, trader and founder of Traddictiv, in his recent webinar, “The Power of a Permission System in Trading” is that of a master chef.

Framework for trading with a competitive edge

‘Prepare, prepare, prepare’ is the motto of many a successful trader and putting a proper futures trading plan in place is essential. Using the right ingredients in the right context of the right recipe is a proper way to approach trading sustainably and efficiently, according to Blasco.

When it comes to cooking, a recipe can be easily followed, but how and which ingredients you use can be a deciding factor on how the recipe, or the trade, works out.

So, what are the ingredients to a recipe to gain a competitive edge when trading? They include:

• Tools and methodology
• Precise rules to manage trade and portfolio risk
• A mindset that keeps emotions under control

To compete more efficiently in the market, make sure those three ingredients are adapted to your recipe for futures trading success. Just like the ingredients to a meal, only following one or two line items will lead to a disastrous result and a meal that’s, well…not so tasty. 

To help ensure your “recipe” works out, having a risk management plan in place helps. “When traders lose, they do so in a way that is limited, and when they are successful, they do so in a way that is generous,”, Blasco said. 

He added that the third and final ingredient of ’emotions’ ties everything together. Without that, the first two ingredients fall flat. Not having the right, even-keeled mindset opens you up to possibly foregoing the tools and methodology to which you typically abide as a trader. Uncontrolled emotions may also possibly lead you to skirting your rules and portfolio risk to make the impassioned trade. 

What does your recipe look like? Will you be updating your ingredient list?

Watch the full event to learn more about how education and simplified thinking can support your futures trading.  

Interested in more futures trading tips? Check out our on-demand video education library. New events occur weekly, so keep an eye on our upcoming webinars as well, where you can view our schedule and register to attend live events.