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
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum continues hinting at rally following reduced long liquidations
Ethereum has continued showing signs of a potential rally on Tuesday as most coins in the crypto market are also posting gains. This comes amid speculation of a potential decline following FTX ETH sales and normalizing ETH risk reversals.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.
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