Trading University, Chicago Blog

This is a reprint of an article form Jan 2, 2010

People that are more likely to find success in trading, or any endeavor, tend to be those who take the initiative. Without that belief in your own ability to take action to insure progress, i.e.: initiative, you will never transition from having a vision — hope –to implementation of a plan to achieve that vision – goal. Your belief and confidence need to get stronger with each step toward the goal. This is what will feed your thought process and attitude.

The most difficult part of the journey to successful trading is learning the basics thoroughly. You will know you are on your way when each step starts to get easier. 

The real secret is understanding how simple trading is. The hard part is getting out of your own way to get to that point.

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Jay Norris is author of Mastering the Currency Market, McGraw-Hill, 2009 and a principal of www.trading-u.com

Comment MACDoug:

I thought this was going to be another vague cliche but I found it concise and accurate. You hit the nail on the head with the “getting yourself out of the way” being the hardest part. This is the all important psychological aspect of trading. How do you suggest one achieves this jay?

Hi MACD,

Great question. For a lot of us meditation or deep relaxation can start to do it. I used to think the markets were some kind of an equation to be figured out so that if we knew the trend on X level and the momentum on Y level then we could figure out what would happen to P. In the end though that’s just guess work. It is important that you know what’s happening on the higher time frames because they do exert influence on the time periods directly below them. But the further down the scale — time frame — you go the less influence they exert. Short-term price action is chaotic, but does serve a purpose: price discovery. What goes up in Dubai and London can go down in the US, and back up in Tokyo, never straying to far from a point of realistic exchange. What we can count on is that major countries currencies will move, and like air temperature (weather) stay within a reasonable band as to not kill the participants. So given that we know the price of a currency pair is going to fluctuate up and down, why would we have an opinion as to it’s short-term direction? (Let’s consider anything less than Weekly to be short-term)

However if a currency, or a stock, or commodity does exhibit the same behavior when it changes direction, then this would be valuable because we would at least understand “where” it changed direction. With that we don’t need the “when” because “whenever” that occurs we will be able to identify it, and adjust for it. And given the fractal nature of markets we could do this on any time frame which suits our global schedule.

We need to understand that “when” is not important in regards to something we have no control over. Not having control is a relief, and patience is a virtue. A trader only needs the “where” of that change of direction so she can put herself in a position to ride along with where the market is going to go.

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.

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