Many people want to become good at currency trading. This however is a difficult business. There are rewards and there are perils. Recently I read about a trader in one of the largest investment banks who said that he could study a trade from every angle, get all of the information he needed from people in his firm, gather advice and still lose money. He could be as certain as is possible as to the direction and price for this trade entry and still lose money. The reason is simple, no one has control of a trade once it has been entered. It doesn’t matter if you are sitting alone in a little corner of your house or apartment in NY, or London, or some remote location. It doesn’t matter if you are in a large investment bank. All that matters is that when you enter your trade, the market moves in your direction. The more right you are, the more money you make.
Unfortunately, most traders, daytraders, currency traders, etc trade systems that are chocked full of indicators. They sit and wait for setups that they have been told or have read are reliable trading methods. I know because I used to do this myself. But this is not what makes markets move. Markets move when people with money and power make them move and the people with the most money and the most power make trades move in one direction until they decide to stop.
So the job of a currency trader is to learn to determine when those times are. A good illustration of this is traders who find a perfect set-up around 8 to 10pm in the evening EST. Everything on your chart tells you to trade. You place your trade and it sits. And it sits. The reason? People with money and power are eating dinner in the U.S. or have gone to be in London.
To understand how to trade it requires a process of moving from “just” looking at your trading charts to learning how and when to enter based on momentum in the market. This is the crux of trading successfully. It is the reason I have developed The Dow Trade and the reason that I wrote a trading course based on momentum in 2011. To learn to trade successfully, in particular during the difficult times that are presenting themselves at present in the world. Understanding the momentum in the market will make you a better and I believe a successful trader in 2012.
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