Professional Traders Don’t Forecast
Posted on 10 November 2009 by Jay Norris
Despite what many retail account holders think, professional traders don’t forecast. The pro’s know that on any given day a market can correct, and that correction can turn into a reversal. For some speculators this may be cause for concern, not for a trader. Traders don’t forecast.
If a professional can definitively tell you the current trend, then by definiton she can tell you at what point in price and time that trend changed. She can point to the very candle or bar which produced the set-up that provided the level which price moved beyond to produce the change/reversal. That definition is what lends the trader confidence in the decision making process and what makes forecasting, like opinions, unnecessary, and even a liability. What the professional understands is that technically she is not making the decision, the market is. The market, through it’s highs, lows, and closing prices provides the framework which defines the critical levels that are the set-ups for coming directional changes. The trader just determines which time frame she is going to heed those changes on.
To see Jay Norris point out trade set-ups and signals in live markets during U.S. day session and evening hours go to Live Market Analysis . Jay is Chief Market Strategist at IBTRADE, and the author of Mastering the Currency Market, McGraw-Hill, 2009 and Mastering Trade Selection and Management, McGraw-Hill, 2011.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.
Tags | "Forex Trading" "Forex Education" "Trading Education", "Trading University Chicago", Add new tag, Al Gaskill, Jay Norris, Trading Experience, trading methodology, trading set-up, trending vs counter-trend trading
Excellent wisdom and understanding,,spot on. Thats THE Holy Grail.
Thanks Kontiki!
nice article. How to be a pro?
Excellent post, Jay. I came across the same point after five year of full time trading. Well… better late than never, isn’t it?
That’s great to hear that someone seems to take the same strategy that I have been.
I’m thinking of calling my strategy the ‘staggered chase the ball’ approach. If you take the form of hedging I’m doing, it’s not really hedging at all because you’re just chasing the decision you’ve made via strategic crosses.
great post excellent
really want to know more of strategy in FX.
:p i thought i’m the only one,, so, there are many people trade like that out there…
is there link or something follow up from this post?
thanks you..
You know what?professional traders even don’t talks.Today I saw a very stupid analysis that made me thinking that majority of these analyzers just mocking people around, Bob Williams says: if they believe in what that says sure they should seat and write for small salary/income.they be playing with their own huge money which gotten by their sophisticated gifted talent.
Cheers,
excellent article. thanks for sharing.
Great comment Mathew, the best I ever red for months. Best Wishes
I totally agree with your view. In trading, I do not use Elliott Wave, Gann and Fibonacci.
I also posted similar topic in my blog too: http://lcchong.wordpress.com/2011/04/20/prediction-or-forecast/