Unstructured Risk - Gambling vs Index Futures Trading

Provided By Ultimate Trading Systems

There’s Always Risk Involved In Index Futures Trading

The index futures trading market is like a stream that is in constant motion. It doesn't start, stop, or wait for anyone or anything. Even when the index futures trading markets are closed, prices are still in motion. There is no rule that the opening price on any day must be the same as the closing price the day before. There aren't any beginnings, middles, or endings in index futures trading.

This makes the index futures trading markets a limitless environment, where virtually anything can happen at any moment, and there are no structures or rules to follow. Even gambling games have built-in structures, which sets them apart from index futures trading -and makes them a lot less dangerous. For example, if you decide to play blackjack, the first thing you have to do is decide how much you are going to wager, or risk. This is a choice you are forced to make by the rules of the game. If you don't make the choice, you don't get to play.

In index futures trading, no one (except yourself) is going to force you to decide in advance what your risk is. Consistent winners always define their risk in advance of making a trade. But defining the risk in advance forces you to confront the reality that each trade has a probable outcome, and you could lose. This is not a comfortable realization.

Consistent losers will do almost anything to avoid accepting the reality that, no matter how good a trade looks, it could lose. Without the presence of an external structure forcing the typical trader to think otherwise, a trader can justify, rationalize, and convince themselves that their index futures trading can't lose - which makes determining the risk in advance irrelevant.

All gambling games have specified beginnings, middles and endings, based on a sequence of events that determine the outcome of the game. Once you decide you’re going to participate, you can't change your mind - you're in for the duration. That's not true of index futures trading. With index futures trading, prices are in constant motion, and nothing begins until you decide it should. The trade lasts as long as you want, and it doesn't end until you want it to be over. But it’s not always easy to choose when to end a trade. No matter what you may have planned, you can become distracted, and uncertain and start index futures trading haphazardly.

Because gambling games have a formal ending, they force a participant to be an active loser. If you're on a losing streak, you can't keep on losing without making a conscious decision keep playing (and losing.) The end of each game causes the beginning of a new game, and you have to actively put more of your assets at risk by reaching into your wallet or pushing some chips to the centre of the table.

Index futures trading has no formal ending. The index futures trading market will not take you out of a trade. Unless you have the appropriate mental approach to end a trade in a way that is always in your best interest, you can become a passive loser. Once you're in a losing trade, you don't have to do anything to keep on losing. You don't even have to watch. You can just ignore the situation, and the market can take everything you own.

One of the many contradictions of index futures trading is that it offers a gift and a curse at the same time. The gift is that, perhaps for the first time in your life, you can be in complete control of everything you do. The curse is that there are no external rules or boundaries to structure your behaviour. The limitless characteristics of the index futures trading environment require that you act with discipline and self-control, if you want to create a steady stream of profits. The structure that you need to guide your behaviour has to originate in your mind, as a conscious decision. It takes discipline, and concentrated effort to create these guidelines. But with your structure, your index futures trading system, in place, you can consistently win in the markets.

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