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1. Follow the trend. There are different methods for discovering the trend. The most popular is using a moving average. Select a moving average length that coincides with your trading style.

2. Cut your losses short. This us easier said than done. Many people do not like to admit when they are wrong. Think defensively and focus on protecting your equity rather than trying to make money. When a loss occurs, make sure it does not wipe you out.

3. Use money management. This can be more important than when to buy or sell. Before entering any trade know exactly how much you plan to risk if the market goes against you.

4. Let your profits run. Do not close out profitable positions too early just because there are profits to take. However, waiting too long for more profits can lead to losses. Before entering a trade have definite exit points in the event of either a profit or a loss. Use trailing stops to let your profits run.

5. Trade with a plan or system and stick to it. Have a disciplined, detailed trading plan for each trade. Know entry price, stop loss price, and price objective. A trading plan that includes these will eliminate impulse or "gut" trades.

6. Do not trade with emotions. Having a plan or system can desensitize your emotions so you can base trading decisions on sound ideas.

8. Trade thick markets. Liquid markets can create slippage problems when entering and exiting markets. Liquid markets are less susceptible to limit up and down moves.

9. Trade the most active months. These have the most liquidity.

11. Know yourself and why you are trading. Many traders lose money because they trade for shear excitement and the adrenaline rush. These are not good reasons for being in the markets. Trade to make money, not to relive boredom.

12. Watch for both fundamental and technical data. Both fundamental and technical traders can affect the market, so observe what they are studying.

13. Use money you can afford to lose. If you are speculating in commodities with funds you need to live off of only, you are doomed to failure because you won't have the mental freedom to make sound trading decisions.

14. Start small. Beginning traders should learn the mechanics of trading before committing more money and before graduating to more volatile commodities.

15. Unless you are a daytrader do not form new opinions during trading hours. Decide upon a basic course of action and do not let the ups and downs during the day affect your game plan. Decisions made during the trading day are often a result of emotions.

17. When you are not sure, stand aside. Do not feel that you have to trade everyday. Standing on the side lines is a position.

18. Isolate your trading from your desire for profit. This can eliminate trading on emotions.

19. Trade divergence's between related commodities. Watch the families, like the metals, grains or meats. When you spot a wide divergence in a group, it could signal a trading opportunity. For example, if the meats except live cattle were moving higher, look for an opportunity to sell live cattle as soon as the meats in general appear to be weakening.

21. Keep it simple. Avoid techniques you do not understand.

22. Survive to hang around for the big moves.

24. Don't liquidate a winner to keep a loser

25. Remember there are six reasons people lose money
[1] Greed
[2] Fear
[3] Greed
[4] Fear
[5] Greed
[6] Fear

26. Finally, Beleive in yourself!

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Disclaimer and Important Risk Warning:

You should understand that trading in the futures and or options markets is not for everyone. There is substantial risk of loss when trading futures and or options. Carefully evaluate whether trading in the futures and or options markets is appropriate, as such trading is speculative in nature. When trading futures, you may sustain losses which exceed your margin deposits. Purchasing options may result in the entire loss of premiums paid for such options. Options sellers should understand that they may be at risk of assuming a long futures position in the case of selling a put or a short futures position in the case of selling a call from the respective strike prices of such options. Past results are not necessarily indicative of future results.
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