First Rule of Trading: It's all about Survival!!

Hello Traders,

The First Rule of Trading:  It’s all about SURVIVAL!!


When I look over my trading I can see areas where I can definitely improve.  I also see my fears allowing me to do things I would not normally do with more capital.  It is a fine line between feast and famine I walk.

Most people would call me crazy … in fact … I have thought of it myself.

AM I CRAZY to day trade the futures market?  My wife is very supportive of my chosen career path, but am I doing my children a disservice?  It is not as if I have any talents outside of trading.  I have tried to sell myself in the open market, and all I get is you are over qualified to work with us.

How very strange?  On one end, I struggle to put food on the table each month, and the other hand I am too qualified to work with most of the companies I have sent in my resume.  So here we stand at an em-passe.

As you look at the picture above, you notice there are two people playing chess.  The one on the left is the devil, and the one on the right seems to be clearly beaten.  You can also see the Angel looking over at the man on the right.  But you will notice, even though, the man on the right seems beaten, he still has his King to move.  The game is not over!

As I look over my trading, what can I say to comfort myself … “it is always the darkest before the dawn” … comes to mind.  Today, I gave up 50 ticks to a market, where if I would have allowed the 3rd trade the proper stop loss I would have been ahead by 16 ticks on the trading day.

The second rule of trading comes to mind … the UGLY word FEAR … I will leave that for another blog post.

Survival should be your first trading rule, but you need to have ‘skin’ in the trading game to allow yourself an opportunity to profit.  I know personally my back is up against the wall.  March was a good month, but now we are in April.  I know in my heart I am only a few trades away from RUIN.  So the ugly FEAR component haunts my trading.

So here I am in between a rock and a hard place with nowhere really left to stand … I stand between SURVIVAL on one side … and FEAR on the other.

Do I have enough trading capital to withstand?  Do I have a valid trading strategy/method?

Will I be stronger at the end of April mentally, spiritually, physically, emotionally?  Will I SURVIVE the month of April?

Only time will tell … but what I have to do … is no matter what … trade my trading signals correctly!

I need to not allow my FEAR to override my SURVIVAL mentality and allow myself the best opportunity to stay in a profitable trade, while allowing myself to MAINTAIN SELF-CONTROL over myself.

It is a tough road I walk down … I make no reservations about it … it is the toughest road I have ever walked down in my life.

April 2nd, 2012:  Trading Statement 

Good Continued Trading,

David ‘Tiger’ Knight

P.S.  April 2nd 2012:  2000 Trades Chart

P.S.S.  Crude Oil Extreme Market Movement

Part I

 Part II


P.S.S.S.  TRUST MY TRADING SIGNALS AND STOPS!!  The WOULDA/SHOULDA/COULDA trading Day!  The 8P to 10P trade missed opportunity!!





About The Author

David M. Knight

I am a 30 Year Futures and Commodities Trading Veteran. In addition, I enjoy games of skill and chance like: poker, craps, blackjack and roulette. During my professional career, I have developed and implemented successful trading strategies and methods; along with winning systems in games of skill and chance. Join with me on our mutual journey together.

  • Yurpie says:

    Jez man, I know exactly what you are talking about. I left 12 years of programming to do trading. Now after 7 years of it having had the big ups and big downs I have alot of knowledge alot of experience. I do great Technical analysis and see price move from the levels I identify time and time again, but when the time comes to pull the trigger I can only do it with small sizes. When I was a newbie I had no trouble going in big, NO FEAR. I see the postman, the gardener…I am not even too worried about money, I want happiness, freedom for me and my family. I wonder what am I doing. What is this path I am on. Some days I remember why I love it, most days actually, but some days come and I really question if I would be better off doing something else. Perhaps I wonder what really is my contribution to society by just going long or short Crude oil or gold…other than giving my broker a spread, liquidity to the market, reallly how important is that….but I love this game I have to say that….its like how I was with girls when I was a boy, I had no experience but I had the looks, now I have the experience but not the looks…same with trading, now I have the knowledge but I also have the FEAR, when I was a newbie I had no FEAR and no knowledge. In my case I was lucky enough to experience a massive gain in my first 18 months, but then I lost all of this and more. I have still not recovered completely from the trauma of that loss I guess.

  • TradeCraze says:

    Well said … when we are young we have NO FEAR! I remember those days well … I used to think if I lost it all no big deal I could always move in with my mom and dad and rebuild.

    This isn’t a choice now with a wife and two kids I have to support.

    The pressure of trading and performance while allowing for an income is the hardest component of trading I have ever tried to accomplish.

    Obviously, I look forward to the time when I look back on this as the FUN time … but right now … I am not having much fun living in between FEAR on one side and SURVIVAL on the other.


  • TTW says:

    Wow. Once again, the man speaks the truth! Shows REAL statements and speaks aloud from the mind of a real trader with a small account, which is most of us I would venture to say. Your honesty will be what makes you a great trader. If you can be this honest in an open forum, I know you are destined to have what you desire in the future as a trader, because you can’t lie about the numbers so you are forced to do better. Your destiny is bigger than you know! Keep this up…

  • TradeCraze says:

    Humbly, I say thank you.