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 treads water above 1.1850 amid thin trading
EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.
GBP/USD flat lines as traders await key UK and US macro data
GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.
USD/JPY extends Japan's weak Q4 GDP-inspired recovery to 153.25 area
The USD/JPY pair once again shows some resilience below the 200-day Exponential Moving Average on Monday and rebounds from the vicinity of the 38.2% Fibonacci retracement level of the April 2025 to January 2026 strong move up. The disappointing release of Japan's Q4 GDP print, along with a positive risk tone, undermines the safe-haven Japanese Yen.
Editors’ Picks
EUR/USD treads water above 1.1850 amid thin trading
EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.
GBP/USD flat lines as traders await key UK and US macro data
GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.
Gold sticks to intraday losses; lacks follow-through
Gold remains depressed through the early European session on Monday, though it has managed to rebound from the daily trough and currently trades around the $5,000 psychological mark. Moreover, a combination of supporting factors warrants some caution for aggressive bearish traders, and before positioning for deeper losses.
Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases
Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.
Global inflation watch: Signs of cooling services inflation
Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.
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