I came across an interesting search of "Futures Trading" results in the Google search engine today. It's one of those trading articles where I sort of scream at the screen and want to choke the person on the other side of it that wrote the original article.

Look at this quote from tradingfutures.biz:

"...Think about it : if it were possible to devise a system for trading profitably, the owner of that system would become almost infinitely wealthy, and the markets in which he traded would cease to operate as indicators of real value. It's just plain silly to think that there's some way you can varnish your toe-nails while a 'system' gets you rich. If their system worked, it wouldn't be in their interest to sell it. The fact is, successful trading requires sound judgement and always involves some degree of risk.

Examples of pseudo-scientific mumbo-jumbo that is guaranteed to lose you money are :

~ The notion that markets move in waves, whose motion can be scientifically predicted. This is a particularly popular one because "after all, you only have to look at any chart to see that such waves exist". Yes, but try predicting the level of any given wave at any given time and you will find it is as futile an exercise as doing the same thing with real waves on a beach...."

Boy, that sure sounds pretty researched and heart felt, doesn't it?

When writing about stop loss orders, that same author writes * the following regarding their opinion:

"...So yes, you need to have a stop loss order in place, but it needs to be a long, long way from your original position and its triggering should mark the end of your campaign. If you do it right, it will almost certainly never be triggered, to the chagrin of your broker and to your enrichment...."

Right there, I take everything the author has said, ever will say, or is thinking about saying - and I throw it out the nearest window of the tallest building I can run into and climb up.

Why Michael? Isn't he trying to help futures traders?

Why? Because it flies in the face of everything I've ever witnessed since I started getting involved in the trading community over 6 years ago.

I've seen people trade without stops. I've watched them lose the fortunes of friends, families, and church members that trusted them with their futures - the futures of their spouses and their families. When someone says to trade with huge stops - or not use them at all - they lose instant credibility with me. I think it's a criminal statement, after watching the futures traders' lives post account explosion. Go back and ask the guys who didn't have stops on 9/11 what they think of that statement.

Secondly - I've met and seen traders that do nothing but trade systems mechanically - day in and day out. I've developed my own futures trading systems from scratch that traded 1 time a day - that were profitable 94 out of 100 recorded instances. I've shared systems with other people and had other people share their systems with me. The truth is - trading systems and methods are universally accepted as a possible source of income. Read "the New Market Wizards" with Jack Schwager, and you'll see how 18 traders around the world all subscribe to this theory to one extent or another. If you don't start out trading without a methodology - you're doomed to failure. The idea that you come to the market every day, making "judgement" in the moment, is an equally horrifying statement to me. I'd love to introduce the author to a trader that I knew that lost $3,000,000 dollars trading the S&P, with $250,000 profit targets and stop loss orders. Having lost it all, "making judgement" they tried to convince me that they didn't need a system....that they were emotionally "in control". It was frightening to listen to her speak...

Last and not least - the author tries to "debunk" the existence of predictable cycles. I know - from my observation of the real world - futures trading or otherwise,  that time cycles exist. We wake up every day, to a room full of customers - to a trading webinar each week filled with people who were given the prediction times the day before - and ask the question, "was this market predictable, and if so, what percentage of the time?". Week after week - the numbers come back from the feedback chat box in the trading webinar dialog box. "60+%......70%...." or sometimes higher. If these cycles didn't exist, we'd be out of business by now. The trading community would have hung us out to dry on every message board and every trading forum online. We'd have been sued for sure.

Trading, day trading, swing trading....if it's forex, options, futures trading - whatever kind of trading it is - needs to be approached somberly and with great fear and respect for the industry. This is not a country for old men, or women. This requires a level of dedication and commitment to excellence far beyond any other industry I've ever been involved with. To throw up a web page that says the things these guys are saying is pretty outrageous - and it hurts to read it.

I'd love to introduce them to my friend...whose futures trading account got down to $250, and his broker let him trade with margin. His goal was $250 a day, using $250 a day - or 100% returns, daily.

Why would anyone share their futures trading system - or share what they're using to make money? Simple.  You meet a guy like my $250 friend....like the man who lost everything he, and his friends and family ever had - and it changes you. Keeps you centered - and convicts you to help anyone that stops long enough to listen.

* (taken from www.tradingfutures.biz.com)

Timing indicators are a misunderstood class of indicators. If they're in NinjaTrader, or Tradestation, or MetaTrader, they can be easily overlooked because on the surface, timing indicators are not obvious like other lagging indicators used by traders in futures, forex, and the like.

I always tell people, timing indicators don't ask you to forget everything you've ever learned about trading the markets- but rather - they politely ask you to remember everything you've learned about trading the markets and applying that information at certain times each day. Instead of looking at head and shoulders patterns, double tops, double bottoms, or candle reversal patterns every minute of every day - timing indicators allow traders to sit and expect those patterns to recur at certain times of the day - allowing them to conserve emotional energy for the proper times.

What amazes me most about timing indicators, are their apparent disregard for news events, or outside disturbances like econs or reports. For example, look at this 60 minute chart on the Emini Nasdaq:

It's clear to see the cycles, ie the red and green markers, play out in the overall market movements. What scares most new timing cycle traders is how those times were pre-determined a week before those times were arrived at. Despite all the news - all the chaos and calamities - the cycles still kicked in.

The deeper we dig into these cycles, the more we see we have to learn and develop. It's been an amazing journey and I'd be lying if we said we thought we'd found it all. I'm glad to see that timing indicators are important to you - and we're looking forward to showing you what we've found and learned.

The time cycles of the debt limit crisis, fascinate me. Mainly because the markets - forex - equities, are not supposed to have any order in these environments. The moves are taught to be irradic moves. You shouldn't find any predictive meaningful cycles or patterns in them as it is a herd of people all processing information at the same time, based on the minute by minute digestion and processing of the available trading information.

In short - how could anyone say with any certainty what the markets would do?

The world is too chaotic - one move to the next - one moon cycle to the next.

It's filled with Osama's and Obama's - it's filled with Irans and i-rate extremists. They are all prone to go on TV or YouTube at any point in time and disrupt the natural flow and ebb of the trading universe. There's no way we can say with any certainty that the market will go up or down or sideways a few minutes in advance, let alone a few days in advance, right?

One look at that chart with one short definition puts a huge wrench in our perceptions, though. The definition being that the green dots, the red dot, represented "predictions". Predictions that were a week old. They were saying, seven days before the market ever got to that point in time - "we should go up, now"...."we should go down, now".

After watching this now for 3 years, and working with hundreds of customers that are watching for these same time cycle patterns in their own day trading - I can say with reasonable authority that these cycles exist. People trading 44 tick charts, and 240 charts, are all walking away saying the same thing,

"The markets are not random".

We'll keep watching these longer time cycles. They are great harbinger of turns, and even good filters for identifying trend direction on shorter time frames. There's no telling what else we'll find as we continue to explore the time cycle indicators.

Trading in the Zone. Huh?  What zone? I thought I was trading in my office....there's a zone?

The following principles are taken from the “Trading in the Zone” by Mark Douglas. I refer to it's teachings constantly in our video series, "Basic Training for Traders". If Trading was a faith, and it had a bible, I believe it would be Mark's book.

Here they are in numerical order:

The 5 Fundamental Truths of Trading:

1. Anything can happen.

2. You don’t need to know what is going to happen next to make money.

3. There is a random distribution between wins and losses for any given set of
variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing
happening over another.

5. Every moment in the market is unique.

The 7 Principles of Consistency:

1. I objectively identify my edges.

2. I predefine the risk of every trade.

3. I completely accept the risk or I am willing to let go of the trade.

4. I act on my edges without reservation or hesitation.

5. I pay myself as the market makes money available to me.

6. I continually monitor my susceptibility for making errors.

7. I understand the absolute necessity of these principles of consistent success
and, therefore, I never violate them.

In "The Disciplined Trader" for example, Mark Douglas points out that typical traders often avoid creating principles and rules, because they simply do not want to take responsibility for the results of their trading. They like the mystery and intrigue of the markets - of thinking that they have some input on what the markets are doing when they trade. They enjoy the working out of it all, taking their best guesses and going against the big boys head to head. They have something to talk about in the golf cart on Saturday - something to share at the dinner table after the movie. They love sharing their opinions in chat rooms, and being asked their opinions by others - the camaraderie of it all.

None of this has anything to do with actual trading.

So print these rules out - and get serious about your profession.

When time indicators and price indicators intersect it's a very remarkable trading setup.

Gann spoke about the confluence of those two universes - stating, "there is a definite relation between time and price".

When the time indicators in the Flux generate a signal, it's based off of thousands of bars of analysis - no small feat. That small green or red dot signifies a distillation of many movements. The computer is in essence saying, "this dot is here, because this is usually when the market goes up, or down. Now. Not 6 minutes from now. Now. Time indicators are great in that sense.

Price indicators are generally okay - but when you do the same data mining on price as you do on time, the answer is more meaningful. Instead of looking at floor trader pivot indicators, or murrey math lines, you're looking at or asking the question, "where has price been reflected in the past?" to your price indicator. The FPC accomplishes that task in the Flux toolset - and brings back a line to show you where those major reflections have occurred in price, over and over again.

Look at this chart from today's AUDUSD:

See the intersection of time (green) and price (red line) above?

Think about the psycological implications of the time indicators, and price indicators, converging here.

You are less prone to risk more - as it should go up - now. And not go down, much lower. The red line serves as a backstop - a launchpad. The green dot serves as a countdown.

We light the rocket, and stand back, and expect a move. It's not so much a guess as a logical expectation of a behavior pattern. When we light the rocket - it usually goes up.

When we see a green dot, above a red line, it usually rises (price).

Most traders aren't using any time indicators, and focus mostly on price indicators.

As you can see from the above - not paying attention to these repeating behavior patterns in time is a self-induced blind fold.

The information can be found, and known, and applied pragmatically.

LOL, the title sounds a little funny doesn't it.

This morning in the live training room, we were discussing what price based indicators actually do for us, and how so many of the ones in the stock "list" really didn't do much to give us a heads up on the market.

They all told us what it had done, but none could project what it should do. Even when loading the amazing Fibonacci tools, there were as many ways to look at them and opinions on what they meant  as there were people in the room.

At one point I took all my Flux timing  indicators off of the chart.

It looked like a hundred mile long stretch of desert highway glaring back at me from the monitor.....not very appealing!

I could see candle stick patterns, and market structure, even a few price patterns, double tops, W bottoms etc.,  but none of them gave me any insight as to the next bar forming on the chart, and what it was likely to do.

Then one of the traders in the room said it looked like I was "trading naked", and to be honest, after having the Flux for so long, that is exactly what it felt like.

It made me realize just how important the timing indicator has become to me, and how powerful it really is.

To see a bare chart, and even put on a few standard trading indicators, Stochastics, MACD, Pivot levels -  it was still not the same.

Without that text on the chart glaring at me, telling me the next turning point was coming in 22 minutes, I felt lost. To be honest it was a little uncomfortable.

I am very thankful to have this powerful tool, and this timing indicator.  It's not an 'end all', or a 'holy grail', but it definitely makes a huge difference in how I see the markets.

I don't think I could trade without it anymore......and feel naked when it's not there.

I received an email a few days ago from a trader overseas that distressed me somewhat.

The email more or less expressed that this trader had blown through her savings, her credit cards, and her trading accounts.

She had a few thousand dollars left in her account, and pending some living expenses, would have less than $500 available for food.

I wasn't sure what markets she was trading....if she was watching the EURUSD, the emini S&P, or Crude Futures - but I certainly sympathized with her situation.

She was desperate, clinging to the last few inches of the trading rope - and finally stumbling on a vendor that cared enough to talk about the darker side of day trading.

And so I sat down to write her an email, expressing my concern for her and most particularly, where she had traded herself into. A death spiral.

I went on to explain that I hadn't met a trader that had traded themselves into those circumstances, and traded back out of them successfully. I didn't know anyone that traded with an account as small as hers was now, and successfully handled the stress from the reasonable draw downs that were sure to ensue. Lastly - the stress of trading to survive when a trader had never been profitable was a Herculean task. And again - I'd never seen it done.

I asked her to explain her methodology to me...what her setups looked like - and what her general profitability was. I was trying to ascertain if she even had a methodology - or like most traders - was drawn into the spider web of fast profit vendors that pushed their plug-in-and-play systems to the waiting hands of naive people.  I know one trader actually that paid $2000 for a "MACD CROSSOVER SYSTEM". We both laughed at that point in the conversation - remembering that we've all been there.

I came to find out she didn't have a system. She was biased by what she had heard on TV and read in the papers. She wasn't taking longs for such and such a reason, or wouldn't take trades on certain days in certain directions because of what so and so had told her. It was crazy trading - no rhyme or reason to it. Straight newbie discretionary trading.

All she wanted to see, was a few Flux charts for later in the week, so she could compare her charts to our signals.

Now, I did the math really quick. After food - she had negative $1500 to pay for the Flux tools. Not a healthy sum.

But that wasn't the really disturbing part.

In a follow up email, she confessed that she wanted the charts sooner if possible, as she had a limit order sitting in the market on the Emini S&P.

I lost all but the last breath in my body. After everything - she was still trading live.

When I pressed her on this trade she confessed, "I'm addicted".

It's easy to get addicted to trading - or the idea of it. For poops and giggles, I went over to the largest trading company's website. Let's call them "FadersInternational".

I went to their Blog. -click-

The blog was a series of client's success posts from the room.

"MADE 50 TICKS TODAY IN 5 SECONDS!!!!"

"UP 14% TODAY!@!!!"

....and so on.

You tell me.....is that an honest, and accurate portrayal of trading - or a silver lined spider's web designed with one purpose and one purpose alone?

We've all been where this woman has been. I've seen things that pain me to talk about.

In the end, I'd like to think that you do traders disservice by not trying to talk them out of trading live, especially without the fundamentals in place.

I want to shake people sometimes and say, "you need to stop, now".

Most times I'd rather shake the other vendors - press their faces into the pages of the emails we get - the cried for help at the 9th hour with nothing left but rent money and mayonnaise sandwiches.  I want to ask them how they sleep at night and look themselves in the mirrors they bought with money from people like this lady.

It's not all profits and playgrounds. Trading, is the hardest thing I've ever seen people try to do.

I don't think I'm going to send this lady charts. I'm going to tell her that she should close her account out, take a break - and walk away.

Build up a savings account, and try again in a year, with fresh ears.

I'm pretty sure she won't listen to a word I'll say, though.