You’ve heard it, and you know it but it still can taste like a bitter pill to the impatient, emotional or the unprepared. Discipline is designing the right environment to achieve the goals you have so that when events occur you’re ready with your strategy. When investing sometimes this means having a plan for adding funds when it’s a steal and other times it means being ready to hold-fast through down-turns and market cycles.
In the Futures Trading and Investing business, discipline can translate in the following ways:
For the Traders: Knowing when to hold ‘em, when to fold them. Knowing when to use stops, protect with options, take profits, double up, or bail.
For Foremost Brokers: It means carefully researching a CTA, its track record, and trading strategies they employ. This review includes examining the various markets, program trades, their trading style (long term vs. short term vs. day trading) their impact on a portfolio, and use of options (to hedge, spread, or outright sell). These are just a few of the ways we look at CTAs. Foremost brokers are well disciplined.
For the Investor: It means reviewing a program of interest with your broker, and having the mental frame of mind to know when to stick with a program or consider advice on when to exit or make a change. This sounds easy, but it’s not! With this information and frame of mind, investors can select CTAs confidently.
It takes discipline to stick with a decision when an account has a downturn and changing the game plan prematurely can often be regretful. Track records are indeed made of losses as well as profits, and managing risk is the key. As a reminder, detailed review of trading advisors and managers doesn’t eliminate risks in the markets. Increased opportunity also comes with increased risk. Only those emotionally and financially prepared should consider investing.
And yes, cod liver oil still tastes like cod liver oil.
Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/