Do you think you have to be smart to make money trading the financial markets? Think again. While there are strong studies on the correlation between IQ and income levels that show the higher the IQ, the stronger the income, I would argue the supply and demand strategy that I write about so often flips that equation. Meaning, from my experience, the less you use your smart brain and instead keep things at the kindergarten level with some discipline, the more likely you will have success.

Let’s take the same approach with this article and keep things really simple.

oil

The chart above is a recent trade we took in one of my live trading sessions with members of the academy. It was in Crude Oil futures, one of the many markets we monitor and trade. The trading opportunity offered us a $3.00 gain for $0.30 of risk. Price rallied up to our predetermined supply zone (retail prices) where we sold short, and then it fell to our predetermined demand zone (wholesale prices) where we bought back for a profit.

As you can see on the left, many students reported reward to risk gains that were very ideal. So, what did we need to master to identify and take advantage of this opportunity? Let’s dive into that question…

Question: How much do we need to learn about the fundamentals of Crude Oil and that market?

  • Answer: Nothing at all.

Question: How much do we need to focus on the fundamentals and news around Crude Oil?

  • Answer: Not at all.

Question: Do we need to know or focus on whose supply and demand it is at our levels?

  • Answer: No, we don’t at all, it doesn’t matter.

Question: Do we need to be an expert in math or economics?

  • Answer: No, not at all.

Question: Does it matter if we really don’t understand what Crude Oil is and think Oil is something that grows on a tree and we eat it?

  • Answer: Doesn’t matter at all.

Question: Do we need to know how to quantify and identify real supply (retail) and demand (wholesale) on a price chart?

  • Answer: Yes, this is how you profit buying and selling anything in life, so you have to master this.

The big illusion is that you have to be a walking calculator or Ivy League economist to be a great trader or investor. The reality is, you don’t. How we make money trading the financial markets is exactly how you make money buying and selling anything.

Really think about how you buy and sometimes sell things in other parts of life. We always try and buy at wholesale prices and sell at retail prices just like any business or store does.

Really think about it for a minute. You probably know what a sale price on laundry detergent is, but do you know the chemical make up of it? Do you care? Do you know the factory it’s made at and who manages that factory? No, you’re focused on price. Whether it’s the detergent, a car, your home or your trading and investing markets, your thought process and strategy should not change. There is only one way to make money buying and selling anything in life. Don’t let the illusion of a complicated financial system fool you.

If you have any questions or comments, please let me know I am always happy to help if I can.

Read the original article here - Are You Too Smart to Make Money?

Learn to Trade Now

This content is intended to provide educational information only. This information should not be construed as individual or customized legal, tax, financial or investment services. As each individual's situation is unique, a qualified professional should be consulted before making legal, tax, financial and investment decisions. The educational information provided in this article does not comprise any course or a part of any course that may be used as an educational credit for any certification purpose and will not prepare any User to be accredited for any licenses in any industry and will not prepare any User to get a job. Reproduced by permission from OTAcademy.com click here for Terms of Use: https://www.otacademy.com/about/terms

Education feed

Editors’ Picks

EUR/USD advances 1.10 amid upbeat trade headlines, after mixed US retail sales

EUR/USD is trading closer to 1.1050, up on the day. US Commerce Secretary Ross has expressed optimism about reaching a deal with China. The Retail Sales Control Group met expectations with 0.3%.

EUR/USD News

GBP/USD soars past 1.2900 as Farage gives additional boost to Conservatives

GBP/USD has leaped above 1.29, the highest since early November, as the Brexit Party has failed to field candidates in 43 additional seats, facilitating a victory for PM Boris Johnson.

GBP/USD News

USD/JPY clings to gains near session tops, around 108.70 post-US data

The USD/JPY pair maintained its strong bid tone near session tops and had a rather muted reaction to the mixed US economic data.

USD/JPY News

Editors’ Picks

EUR/USD advances 1.10 amid upbeat trade headlines, after mixed US retail sales

EUR/USD is trading closer to 1.1050, up on the day. US Commerce Secretary Ross has expressed optimism about reaching a deal with China. The Retail Sales Control Group met expectations with 0.3%.

EUR/USD News

GBP/USD soars past 1.2900 as Farage gives additional boost to Conservatives

GBP/USD has leaped above 1.29, the highest since early November, as the Brexit Party has failed to field candidates in 43 additional seats, facilitating a victory for PM Boris Johnson.

GBP/USD News

USD/JPY clings to gains near session tops, around 108.70 post-US data

The USD/JPY pair maintained its strong bid tone near session tops and had a rather muted reaction to the mixed US economic data.

USD/JPY News

Crypto Today: Playing with the thin red line

BTC/USD has fallen below $8,500 during the Asian trading session. A close below this support level would put $7,500 on the trading table. ETH/USD is moving below the 50-period exponential moving average.

Read more

Gold looks to close week with small gains below $1,470

The precious metal struggled to find demand on Friday as the upbeat market mood on renewed hopes of the United States and China reaching a trade deal to avoid a tariff hike in December caused investors to move away from safe havens.

Gold News

RECOMMENDED LESSONS

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.

Strategy

Money Management

Psychology