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 tests nine-day EMA barrier near 1.1650
EUR/USD moves little after registering modest gains in the previous session, trading around 1.1640 during the Asian hours on Tuesday. The 14-day Relative Strength Index momentum indicator, at 44 (neutral-to-bearish), confirms fading momentum.
GBP/USD meets some resistance near 1.3440
GBP/USD reverses the earlier pullback and manages to pick up strong upside traction on Monday, climbing to as high as the 1.3440 zone. Cable’s sharp bounce comes in response to the fresh selling interest hurting the Greenback amid the resumption of tariff jitters.
USD/JPY trades flat above 158.00 amid trade war fears
The USD/JPY pair holds steady near 158.15 during the early Asian session on Tuesday. The pair steadies as safe-haven flows offset speculations that Prime Minister Sanae Takaichi may soon call a snap election. Traders await the ADP weekly report later on Tuesday for fresh impetus.
Editors’ Picks
AUD/USD trades with negative bias above 0.6700 ahead of PBOC rate decision
AUD/USD edges lower during the Asian session on Tuesday, reversing a part of the previous day's goodish move up ahead of the PBOC rate decision. In the meantime, Trump’s tariff threats continue to weigh on investors' sentiment, driving some safe-haven flows to the US Dollar and acting as a headwind for the risk-sensitive Aussie. However, the RBA's hawkish stance should limit the downside for the Australian Dollar.
USD/JPY trades flat above 158.00 amid trade war fears
The USD/JPY pair holds steady near 158.15 during the early Asian session on Tuesday. The pair steadies as safe-haven flows offset speculations that Prime Minister Sanae Takaichi may soon call a snap election. Traders await the ADP weekly report later on Tuesday for fresh impetus.
Gold edges higher above $4,650 as Trump tariffs spark safe-haven demand
Gold price edges higher to near $4,670 during the early Asian session on Tuesday. The precious metal is set to hit a fresh record high as traders flock to safe-haven assets amid a persistent geopolitical and economic outlook.
Ethereum bounces off key trendline as retailers distribute, network activity booms
Ethereum saw mixed sentiments in its on-chain activity over the past week. While whales accumulated amid a surge in network activity, retailers distributed as escalating geopolitical tensions over Greenland eventually pulled down prices.
When tariffs become ammunition and capital becomes the battlefield
Markets opened the week like a risk engine hitting a pothole at speed. Equities stepped back, gold vaulted to fresh highs, Treasuries caught a bid, and the dollar, outside of havens, took on a soft bid. This was not a data-driven wobble or a valuation purge.
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