E-Mini Trading: What Causes Traders to Over-Trade?
One of the mistakes I often see with novice or beginning e-mini traders is a tendency to take too many trades. This is called over-trading. On a typical day, I may see between 3 – 5 potential trades in the morning trading session. Just to cover myself, I will admit that every now and then you have days when there are more than five setups in the morning trading session, and there are some days when I don’t see any trades in the morning session.That being said, it’s not unusual for one of my traders to have 10 or more trades in a time period where I only see 2 or 3. What is that all about?There are a several variables that cause an inexperienced trader to take too many trades. With very few exceptions, the only person who makes money on an over-traded account is your broker. Let’s look at some causes of over-trading:Starting the day with a substantial losing trade can cause even experienced traders to over-trade. In my personal trading, there is no worse feeling than looking at my trading DOM and seeing $-750 in bright red numerals. I have to fight the impulse to try and get my account back to even money as fast as possible. I find that this is a nearly universal impulse among e-mini traders.· This universal impulse can cause traders to take trades that are lower probability than normal. Under normal conditions, most traders go through a trade evaluation process that should be conservative in nature and decide to take only the highest probability trades. On the other hand, on a morning you are in the red from the start, it is not uncommon to lower your criteria and choose a higher risk/lower probability trade; the end result, in this situation, is often a second losing trade. Individuals increase their trading risk profile by altering their risk management plan because they had an initial losing trade.· Another common pitfall a trader may find himself/herself in also centers on an initial trade that results in a substantial loss. Just like our previous example, the e-mini trader is staring at a $-750 in bright red on their trading DOM. What’s another way to get back to even quickly? Trade more contracts. In this scenario, the trader may make a thorough evaluation of the trade, then take the trade with double the number of contracts than they would normally execute. Again, if the trade moves against the individual, the increased leverage doubles the size of the loss. In this situation, traders increase their risk profile by altering their money management plan because they had an initial losing trade.· Finally, it is not uncommon for a trader to have a day where he or she is not emotionally prepared to trade. When a trader is not prepared emotionally, the results can be disastrous. I find myself in an “emotionally unprepared” state one or two days per year. On those days, I tend to throw the trading plan out the window and take trades that are illogical, disorganized, and poorly constructed from a technical standpoint. I have increased my risk by altering my trading plan and the result is generally a losing day. As I have gotten older I have become more proficient at identifying this problem early on in the trading session and can usually stop trading and go golfing before costing myself very much money. I don’t know why these in frequent events occur, but most traders admit that they rear their ugly head from time to time.As you can see, all of these over-trading problems have their roots in emotional control, or more accurately, lack of emotional control. It is my opinion that learning to control your emotions is essential for trading success. I teach several different techniques which allow an e-mini trader to assess their emotional state before each trading session and generally recommend some fairly simple emotional/intellectual exercises to calm down and prepare for the day of trading.
10 Things Every Small Business Should Do To Be Successful in Today’s Tough Market Conditions
The news about the recent economic problems and the looming double dip recession has been tough. The on-going Eurozone economic concerns have triggered a complete collapse in consumer confidence not seen since the original 2008 recession. The consumer confidence collapse coupled with the growing anxiety around global debt has led to a restriction of credit made available to small businesses as worried banks reduce their perceived risk to bad loan repayments. With consumers keeping hold of their money and credit becoming harder to access it is no wonder that small businesses are struggling. This article talks about the important role and benefits accounting software can play in allowing small businesses to navigate through these hard economic times.How can accounting software help small business?Business must be lean and financially sustainable to survive through the current business climate. Small businesses with large overheads and complex financing structures should work on re-organising the business to regain control of their long term economic futures. Now is not the time for reckless investment in the pursuit of growth that only adds increased debt and inflexibly that could ultimately lead to the businesses downfall. Now is the time for prudence and tight financial management that allows a business to be financially independent. Accounting software can be central to supporting small businesses become financially independent and below investigates how.1) Complete focus on cash flowA business owner should be 100% focussed on the financial health of their business. This means having a thorough understanding of the businesses cash flow position. There is nothing more important in a small business than its cash flow position and as result should be very tightly managed. One of the difficulties for small businesses keeping on top of cash flow is the organisation of receipts and invoices. An accounting software package easily compiles all of the relevant financial information and presents easy to understand dashboards and reports of company performance. Once provided with the required knowledge of the company’s performance appropriate action can be taken to improve the company’s performance.2) Focus on customer satisfactionIn times of economic hardship competition is notably increased in every sense. As customers are more considered with their buying decisions small businesses need to ensure that every aspect of their proposition is appealing to the customer. Margins are widely squeezed across all industries in the hope of enticing hard-up customers and therefore the only real differentiator to attract business is customer service. An accounting software package does not only improve business productively it also helps structure all customers and suppliers into an easy to manage database. This structured knowledge allows staff to provide a more tailored service to clients.3) Look for ways to cut costsIn this economic climate any investment that doesn’t directly add value to the top line should be cut. Accounts Payable features with an accounting software package detail every penny that is spent in the business. This allows a thorough review of expenditure to take place to ensure that savings can be made where appropriate. For example costs could be cut down on paper, postage, transitioning to direct debit payroll. These cost cuts would allow the business to reduce its operating cost without cutting expenditure that generates income into the business.4) Consolidate SuppliersBusinesses can also use accounts payable features within their accounting software package to streamline its supply chain. Many businesses needlessly have similar supplies from a range of suppliers. Buying in bulk is always a more economical way of doing business. Condensing suppliers with larger orders is more commercially viable in reducing supply costs. Generating reports by independent supplier will provide valuable information regarding the profitability of each supplier contract.5) Negotiate better rates with long standing suppliersIn addition to the consolidation of the supply chain there may also be an opportunity to renegotiate rates with long standing suppliers. The longer the relationship between a business and a supplier the more appropriate it would be that the business qualifies for a rate that reflects the loyalty of the relationship. Reducing the costs of the supply chain can make a significant and welcome difference to a small business P&L during tough recession times.6) Continuously look for ways to reduce non value adding admin workIn any small business the time of employees is one the company’s biggest assets and therefore spending time on non-value adding activity should be minimised wherever possible. An accounting software package ensures that people are not tied up managing basic bookkeeping tasks and completing quarterly and end year financial reports. Managing a business’s financial affairs can be very admin heavy if not managed in the correct manner. Having efficient software to automate these admin tasks allows staff to focus their attention on growing the business and generating income.7) Streamline payroll and human resource managementAs already discussed people are a huge asset in any small business. An accounting software system can help provide detailed information around staff costs in addition to hours worked and absence information. Having detailed information about staff costs allows a business to more accurately plan for the future and correctly budget for human resources. Also from a financial perspective large fines are imposed on businesses that make mistakes on Tax and National Insurance contributions. Having automated software negates the risk of mistakes occurring at a time when fines cannot be afforded to be taken.8) Streamline billing and invoicingNot being on top of your receivables can literally be the difference between success and failure in today’s challenging business environment. An accounting software package allows a business to fully manage and organise its invoices and payments deadlines around the businesses bills and costs. This way invoice payments get received in advance of bill payments ensuring cash flow is never a problem. Having effective and well organised billing and invoicing ensures that a business income remains consistent.9) Assertive debt collection techniquesEven if a business has streamlined invoice and billing processes there will still be some customers that do not pay on time. All of the structure and process in ensuring invoices are aligned with business costs will have been wasted unless good debt collection processes are adopted as well. Businesses should know when to make phone calls, send written communications and when work with debt collection agencies in order to optimise income collection.10) Know you financing optionsThe Accounting software package allows a business owner to have detailed forecasts of predicted income and expenditure over the short, medium and long term. Having a longer term view of capital expenditure allows more intelligent decisions to be made around company financing. As a rule of thumb last minute loans tend to be expensive as owners run out of time and simply need to pay bills. All forms of business financing from credit cards to structured loan agreements should be reviewed in line with long term accounting forecasts to ensure that the best suited finance is in place at the best possible price.It has never been more relevant for a small businesses to invest in an accounting software package. The benefits run much deeper than simply allowing businesses to keep accurate and timely financial records. Accounting software enables a business to self-analyse every business process in the eyes of profitability and business return. Businesses that adopt the mind set of accounting software by definition embrace the notion that all company expenditure should be controlled and used to drive additional revenue for the business. These lean businesses will be financially sustainable and able to withstand these hard economic times in order to be well positioned in the market to capitalise when consumer confidence returns.
What Are The Qualities of A Timeless Brand?
A brand that instantly pops in the mind of a consumer for a certain product, built through the years and has withstood the test of time is one of the definitions of a timeless brand. It is a name or a company that has been around for a long time but is still considered to be among the top brands loved and supported by its audience. A timeless brand is iconic and its branding has played a role to its long-term success.Among the timeless brands that have managed to successfully emerge on top throughout the years includes Apple, KFC, Nike, and Cadbury to name a few. They all have reached a certain level of success, a meaningful brand that did not give in to the fads. They stayed true to their beliefs and managed to stand the test of time.How Can You Make Your Brand Timeless?
As a business owner, it is possible to create a brand similar to these. Your brand can last, with dedication, hardwork and a few tips that could help you push on as you aim for a lasting impression and following for your brand.Knowing What Trends to Ship
Trends come and go. However, there are unique instances when trends can become norms and play an essential role in the market. Automation, for one, is a type that eventually became a necessity to help brands do more without really having to spend more and exert intensive efforts.Companies should be aware on what trends to invest in and what trends are bound to bounce in a few years time. Most of the time, trends are unlikely to be in the future. To withstand time, continue building a strong foundation for your business, crafting your brand identity and solidifying it, creating a timeless brand that is bound to stay, despite and inspite of the trends that may arrive in the industry.Start and Stand with a Brand Strategy
A brand strategy is your business plan. It is a guide that will help you outline where you want to go and how you can get there. Your unique brand strategy includes your traits, your purpose and your voice. These ideas should be conveyed in your branding and marketing efforts.Included in the strategy is the demographic and the psychographic information on your audience. This will guide you through the process of creating targeted efforts that suit your market. Work alongside experts to be able to develop and execute details of your brand strategy effectively. Taking time to develop your brand instead of haphazardly arriving and executing ideas helps avoid rebranding, which can be time-consuming and a waste of resources.Consistent
Timeless brands are consistent. They stick to what they believe in and stand by their branding. What makes it easy for them to stay consistent is they try to keep things simple. Although it may be tempting to go all out when creating a brand – having numerous design elements and cool ideas rolled into one.However, as history reveals, all the timeless and most celebrated brands of today kept it simple – Apple, Nike, Adidas. They kept their branding simple and easy to remember. In one glance, their logos are very recognizable, creating a solid impression of the brand from its audience.Embraces Changes
Creating something timeless and classic is not tantamount to avoiding change. As people and audiences continue to evolve, brands are required to evolve and adapt in some way too. If you want to remain successful and stay in the industry, your brand needs to evolve too.McDonalds is a perfect example for this. It was initially introduced as a destination for affordable, fast-food burgers and fries. Eventually, they had to grow as the demands of their audience evolved. They have branched out to healthier menu offerings such as fresh salads, grilled chicken and apple slices. As you grow as a brand, you grow your audience while keeping the good old ones still satisfied and happy with your brand.Branding is more complicated than most think. It is not just about choosing the right combination of colors and strategies. It is a process and a journey that can help brands become more cohesive, strong, memorable, and lasting.