It's-all-too-common
It's a universal experience. You feel personally attacked or demoralised when it happens, correct?
The good news is there's a solution, which I'll share in a minute. But first, knowing the issue is key to understanding the solution.
Lost on traders is:
Trading is not waiting for a pattern or setup to appear to enter the market—that's amateur hour.
Instead:
Imagine you're a detective solving a crime. You start by gathering evidence and—like a puzzle—putting the pieces together to form a plausible thesis.
The same applies to trading. But instead of solving a crime, you're solving:
- Who's going to move the price?
- Why will they move the price?
- Where will they move the price to?
What do you notice about the questions above? They're focused on the actions of human beings, and for good reason.
If not familiar, the Medallion fund is famed for the best record in investing history.
It's a fund that trades using computer-programmed models. Founder Jim Simons revealed:
"We don't want to predict price, but we want to predict when other market participants are going to do something."
Cycles, sectors, technology, and market activities are always changing, which is why trading strategies have short shelf lives.
The only approach built to last is rooted in human behaviour because human beings don't change.
But what about playbook trades?
Let me explain:
You did or still travel the same route to and from work.
But ignoring the time they take, there are alternative routes you can choose.
Price takes different routes from one price level to another regularly. Each signature trade is a map of a one of the routes price can take.
If and when the market starts agreeing with your thesis, choose the signature trade matching the current route.
Now you have accurate directions to trade your thesis. Make sense?
A note on human behaviour:
You can pay experts on human behaviour who'll tell you everything there is to know about:
- Unconscious bias,
- What happens at a brain-chemical level and,
- How it impacts decision-making.
But ask them to show you all the different ways it's expressed in the markets, and it's... crickets.
Yet the footage below is your front-row seat to a trading approach rooted in human behaviour.
Human beings don't change, so these principles have always been effective and will continue to be so in the future.
Now's the perfect time to cement your understanding of how effective trading is when based on human behaviour with the 3 minute demonstration below.
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD moves sideways below 1.1800 on Christmas Eve
EUR/USD struggles to find direction and trades in a narrow channel below 1.1800 after posting gains for two consecutive days. Bond and stock markets in the US will open at the usual time and close early on Christmas Eve, allowing the trading action to remain subdued.
GBP/USD keeps range around 1.3500 amid quiet markets
GBP/USD keeps its range trade intact at around 1.3500 on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders move to the sidelines heading into the holiday season.
USD/JPY corrects further to near 155.80, gives up entire BoJ policy-led gains
USD/JPY surrenders its entire gains made on the BoJ policy announcement day, and retraces to near 155.80. Investors are in vogue over the outlook of the BoJ’s monetary tightening campaign. The Fed is expected to cut interest rates by at least 50 bps next year.
Editors’ Picks
EUR/USD Price Annual Forecast: Growth to displace central banks from the limelight in 2026 Premium
What a year! Donald Trump’s return to the United States (US) Presidency was no doubt what led financial markets throughout 2025. His not-always-unexpected or surprising decisions shaped investors’ sentiment, or better said, unprecedented uncertainty.
Gold Price Annual Forecast: 2026 could see new record-highs but a 2025-like rally is unlikely Premium
Gold hit multiple new record highs throughout 2025. Trade-war fears, geopolitical instability and monetary easing in major economies were the main drivers behind Gold’s rally.
GBP/USD Price Annual Forecast: Will 2026 be another bullish year for Pound Sterling? Premium
Having wrapped up 2025 on a positive note, the Pound Sterling (GBP) eyes another meaningful and upbeat year against the US Dollar (USD) at the start of 2026.
US Dollar Price Annual Forecast: 2026 set to be a year of transition, not capitulation Premium
The US Dollar (USD) enters the new year at a crossroads. After several years of sustained strength driven by US growth outperformance, aggressive Federal Reserve (Fed) tightening, and recurrent episodes of global risk aversion, the conditions that underpinned broad-based USD appreciation are beginning to erode, but not collapse.
Bitcoin Price Annual Forecast: BTC holds long-term bullish structure heading into 2026
Bitcoin (BTC) is wrapping up 2025 as one of its most eventful years, defined by unprecedented institutional participation, major regulatory developments, and extreme price volatility.
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.