I continue to be amazed by the sheer number of newbie/novice FX traders that trade on the basis of hope & luck... and still expect to make money from trading FX. Some will resort to relying on calls and signals that other traders make, throwing caution into the wind. They either forget or ignore the term 'caveat emptor', i.e. "let the buyer beware."
Instead of putting the required time & effort into such a serious field of study... many try and take the shortcut to success, and often with disastrous consequences.
Even if you are willing to follow another trader's calls... at the very least, please ask the trader to provide the 'basis' of their calls. "Because my system says so", "because I'm the best trader here", "because I'm 90-100% right" and "because I am immortal," hardly qualify as a basis of a good call.
Any trader worth his salt would at the very least provide you with his chart and/or reasoning... and would readily admit his/her own shortcomings and flaws. Also, the traders making calls have a responsibility to provide the reasoning, risk management parameters and expected timeframes behind their calls. To make calls without providing further information is grossly irresponsible... for as the market is both fluid and dynamic, no trader is ever 100% on the right side of a trade.
There's a story that I like to tell. The path to becoming a successful FX trader is similar to that of a fighter pilot. Some may possess the natural ability to tear up the skies... but to be truly accomplished, nothing short of the best training, equipment and experience are required.
Armed with the most basic of flying skills, a lone rookie pilot in a small private plane armed with perhaps a small side-arm would stand very little chance going up against an accomplished fighter pilot in his/her armed-to-the-teeth multi-million dollar, state-of-the-art fighter jet!
On top of that... what chance would the poor pilot have taking baseless directions from an unknown voice over the radio?
Think about it.
Fixed Ratio Money Management
It's been a while since I last blogged about Money Management, what many consider to be the most important yet overlooked subject in trading. As one of the three (3) pillars of trading success (the other two being Mind and Method), I therefore feel that I have an obligation to share more of my thoughts on the matter.
Click HERE for more
Click HERE for more