I was checking my e-mail on Friday and received a request from one of my followers. In the e-mail he was challenging me to write a piece of article that relates one of the greatest electronic bands of all time to trading. Rather than writing another article on Technical or Fundamental Analysis, I have decided to take up the gauntlet. Here is what Depeche Mode- one of the most successful bands ever can teach you about successful trading.
People are People
“You’re punching and you’re kicking and you’re shouting at me /
I’m relying on your common decency /
So far it hasn’t surfaced, but I’m sure it exists /
It just takes a while to travel from your head to your fist.”
Losing trades suck! Every time a trader is in a losing trade he/she goes from feelings of anger to self-pity. This is probably the feeling that traders abhor most. A loosing trade makes you feel like you want to “punch and kick” and there is not much you can do about it.
Everything Counts
“The grabbing hands grab all they can, all for themselves /
After all, it’s a competitive world /
Everything counts in large amounts.”
The greedy trader. A lot of traders are willing to accept that greed has cost them more than anything else. Indeed, the desire to make more and then even more is very compelling. The concept of “grabbing hands” in trading is not strange at all. In the end of the day, maybe greed is not good for you.
Broken
If you want control without any pain/
How long will you suffer?/
How long will you wait?
Going against the market. One of the biggest obstacles in trading is human nature. How many times have you been struck in bewilderment only to realize that Mr. Market is always right? Trying to catch a falling knife is a well-known misdemeanour, which has never led to any good. So, how long are you ready to suffer? How long will you wait before being ready to “swallow your pride” and let this trade go…
It’s No Good
Do we have to wait till our worlds collide/
Open up your eyes/
You can’t turn back the tide/ […]
Subjectivity. Subjectivity is one of the major reasons for trading strategies failing and traders losing money. What can be more difficult than admitting to yourself that your ideas are wrong. No matter how convinced you are, open up your eyes and look at the market direction. You cannot turn back the tide, so you’d better take another shot or call it a day.
Policy of Truth
Now you’re not satisfied/
With what you’re being put through/
It’s just time to pay the price/
For not listening to advice
Looking for the Holy Grail of Trading. A very common misconception is the idea of the holy grail in trading. It is one of the most sacred beliefs of the beginner trader. In trading, listening to others could lead to costly mistakes. Trying to trade on tips has never led Jesse Livermore to any good decisions. Following your broker’s advice… maybe not today. Now you are not satisfied? Well, look elsewhere, because what you are being put through is just the price to pay for listening to another man’s advice!
This material is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results.
Editors’ Picks
EUR/USD flirts with daily highs, retargets 1.1900
EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.
GBP/USD remains well bid around 1.3650
GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.
USD/JPY edges up above 153.50 with all eyes on US CPI figures
USD/JPY appreciates above 153.00 but remains on track for a 2.4% weekly loss. Trading volumes remain subdued on Friday, ahead of the IS CPI release. The Yen remains supported by hopes of a stable government and calls for further BoJ tightening.
Editors’ Picks
EUR/USD: Yes, the US economy is resilient – No, that won’t save the US Dollar Premium
Some impressive US data should have resulted in a much stronger USD. Well, it didn’t happen. The EUR/USD pair closed a third consecutive week little changed, a handful of pips above the 1.1800 mark.
Gold: Metals remain vulnerable to broad market mood Premium
Gold (XAU/USD) started the week on a bullish note and climbed above $5,000 before declining sharply and erasing its weekly gains on Thursday, only to recover heading into the weekend.
GBP/USD: Pound Sterling remains below 1.3700 ahead of UK inflation test Premium
The Pound Sterling (GBP) failed to resist at higher levels against the US Dollar (USD), but buyers held their ground amid a US data-busy blockbuster week.
Bitcoin: BTC bears aren’t done yet
Bitcoin (BTC) price slips below $67,000 at the time of writing on Friday, remaining under pressure and extending losses of nearly 5% so far this week.
US Dollar: Big in Japan Premium
The US Dollar (USD) resumed its yearly downtrend this week, slipping back to two-week troughs just to bounce back a tad in the second half of the week.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.