How to Stop Losing Your Money in Futures Trading

If you are finding that you’re losing more money than your making and you don’t know how to stop it, you probably have some bigger issues that you need to face and fix before you can stop the bleeding. I am going to give you a two-part solution in today’s article that will provide you with the insight you need to stop losing more money than you are making in the markets.

Part one: Master your mind

The main reason why most traders lose money is because instead of consciously controlling their emotions in the market by pre-empting all aspects of their trading, they get caught up in a game of emotional trading, mostly because emotional trading is easier to do and offers more “excitement” than disciplined, controlled trading.

The market essentially offers traders two options:

  • Gamble your money away on an up and down emotional roller-coaster of trading.
  • Learn to master your mind by becoming a disciplined trader and make slow but consistent money over time.

I will assume that your aim and goal is to become a disciplined trader so that you can foster the proper trading mindset in order to not gamble away all your money in the markets like so many traders do. Let’s look at the two primary aspects of mastering your trading mindset:

Understand and implement proper money management to attain mastery of your mind

If you want to attain the proper trading mindset and really master your own emotions when interacting with the markets, you will first need to understand and implement proper money management. The reason why so many traders become emotional when they trade is usually because they are either risking too much money or trading too frequently.

When you risk too much money per trade, you inherently place greater meaning on each trade, since you have more to lose; this naturally causes you to become more worried about the trade and more emotional in general. Once you induce this type of emotional trading, it works to feed on itself and cause more emotional trading. When you lose on a trade you’ve risked too much money on, you put yourself in a very vulnerable position to continue the cycle because you will feel great frustration and anger over the amount of money you just lost, and this will work to fuel your desire to continue risking too much in order to try and make back the money you just lost. If you want to avoid this type of emotional trading, you must learn to become a disciplined trader.

Another way traders mismanage their trading account money is by trading too frequently. Many of my students are surprised when I tell them that I only enter two trades a day on average. Some days I might trade two or three times, some days not at all. The point is that most traders trade way too much and most traders also lose money over the long-term, I don’t think this is just a coincidence.

When you find yourself over trading, what you are really doing is acting emotionally and gambling. Thus, in order to stop over trading, you have to learn to control your emotions by having a detailed risk management plan that also includes specifics on how you can avoid overtrading.

Perhaps the best way to avoid overtrading is to know exactly what you are looking for in the market. You should have all of your trading strategies detailed in your trading plan, this way you never take a trade that is not up to the standards you’ve detailed beforehand.

Design and use a trading plan and trading journal to maintain mastery of your mind

In the previous section, we discussed how understanding and implementing proper money management is necessary to attain mastery of your mind. Now let’s talk a little about how to maintain this mastery once you’ve attained it.

The two main “tools of the trade” for maintaining mastery of your mind as you trade the markets, are trading plans and trading journals. As we discussed previously, having a  trading plan that details all of your trading strategies and setups is crucial for navigating the market in an objective and logical manner; so that you don’t enter trades for no real reason and so that you stay true to the concepts you mastered in your trading strategy.

The other main tool of maintaining the proper trading mindset is the trading journal. It’s necessary to track all your trades so that you develop a track record that reflects your ability to remain disciplined and create something that gives you accountability. By creating a track record that reflects all your trading activity, you will have a tangible piece of evidence that will directly reflect your ability to trade properly. If you diligently update and use your trading journal, you will see for yourself whether or not you are maintaining your discipline, and if you are trading in a disciplined manner you will not want to “mess up” your track record of disciplined trading reflected in your journal by trading emotionally. Most traders simply do not feel they need to create a trading track record or a trading plan, most traders also lose money in the markets, again, I don’t think this is a coincidence.





Part two: Master your trading strategy

The next thing you must do to stop losing your money in the markets is to truly master your trading strategy. I find that a lot of traders are simply “running and gunning” and don’t really know what they are looking for in the markets, this induces emotional trading because you end up “shooting” at anything that moves instead of “sniping”, in essence, if you haven’t truly mastered your trading strategy, you are likely going to over-trade.

Master one strategy at a time

The first step to truly mastering any trading strategy is to master one aspect of it at a time. I teach traders who learn my price action trading strategies to master one price action setup at a time before moving on to another, this way they become fully proficient in each setup before they attempt to load their brain with more information, this “specialization” allows for a deeper understanding of each price action trading strategy I teach. When you think about a specialist in any field, they are usually the people making the most money in life. Thus, I highly recommend you master one trading strategy at a time in order to become a “specialist” of each.

Trade like a sniper

Next, after you have fully mastered an effective trading strategy like price action, it’s time to implement it. Unfortunately, many traders fail at this aspect even after mastering their strategy because they don’t have the patience to trade like a sniper. You must learn to pick and choose your entries wisely and not trade too frequently; this is what I call trading like a sniper and not a machine gunner. Most traders trade like machine gunners and very quickly run out of “ammo” (money). If you want to make your bullets count and achieve your goal of making money over the long-term, you will need to conserve your ammo and only fire at the high-probability trade setups that you have mastered and subsequently detailed in your trading plan.


To learn more about how to stop losing your money in the markets join me in our live trade room using Supply/Demand & Orderflow Strategy.

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