Lessons from the Pros


The Forex “Experience”

Following a very successful and productive few weeks of teaching at the Online Trading Academy campus in Philadelphia, I am sitting here waiting to board my plane home to London, killing some time doing a little research on a new project I have just started working on. While doing my work, I came across a currency trading website which was detailing the various advantages of entering into the Global Forex markets and was also explaining why it is “easier to make money” in the FX Markets than it is in other financial arenas such as Equities, Futures and Options. As a multiple asset trader and teacher myself, I decided to carry on reading the information on the site out of curiosity, leading eventually to my inspiration for writing this particular article.

Moving forward through the website I was not all that surprised by the “Golden Nuggets” of information which were being provided. Search pretty much any website in the world or read any book on how to trade the currency markets and you will generally find similar variations of the same tips and tricks to use across the board. Now don’t get me wrong, I really do not have any issue with this at all. I do think it is great that somebody who is new to the markets can search on the web or pick up a book on the subject before going any further with it. This would be a useful exercise in explaining some of the aspects of what is involved in trading FX and would give anyone at the beginner level, a basic idea if it is an activity which they may of may not wish to pursue any further. However, I would suggest that if you really want to know the fine details of online stock trading, then it is best to go ask a trader right? Let’s be honest if you wanted to get the most accurate idea of what a day in the life of a doctor is like, then really it would make most sense to go and ask a doctor about it. That’s why we here at Online Trading Academy hold the 3-Day Market Timing Classes across the world, so as to give people a solid insight into trading and investing to achieve short-term income and long-term wealth.

What always surprises me the most about the generic information found on websites and in the trading books, is typically just how generic it actually is and also how misleading it can be as well. While there are many facts about the FX markets that happen to be true, this does not automatically mean that it is information that will prove to be useful in the quest to attain consistency in the markets. One of my earlier mentors in trading once told me to be cautious of anything which comes for free. When I asked him what he meant by this, he simply replied that in his humble experience he found that anything really worth having always had a price. That price could be financial, time-based or maybe a mixture of both. Whatever way I looked at it he said, you always have to pay to play the game. I must admit that his lesson was not one of the clearest I had been given back then, yet over time its deeper message became apparent to me on many different levels.

As you may have guessed, I was one of those people who always believed in education and would happily seek the knowledge of others, no matter the costs but I also realized that the more time I spent going through my plan being consistent in my actions and learning from the mistakes I made as a trader, that I gained the most valuable lessons and education of all: experience. My personal definition of “experience” is this: “Experience is nothing more than making bad choices, surviving them and learning a lesson about how to avoid making that same bad choice again.” Others may put this in a very different way than me and of course that is just fine. This is the way I see it and I have found it to be a most empowering way to deal with my experiences in life. So what does this all have to do with the FX website I was looking at earlier in my day then? Let’s go a little deeper into it.

There are without doubt certain characteristics of the global currency markets, which give this asset class it’s distinct “uniqueness” over other markets, which in turn have their own “uniqueness” over others too. However, just because someone tells you that it is easier to make money in the FX markets on a random website, does no make it true. Sure I read about how Trends in the FX pairs run longer than other markets, making it easier for traders to get involved in the big moves. I also hear about how cheap it is to get into the world of FX and how tight spreads make it great for day trading opportunities. I also hear about how we all get the economic news at the same time, thus creating a far more level playing field for news-based trading. Another thing I heard about, was how the volatility of the currency markets made it the ideal asset class for breakout style trading too. The list goes on an on. Go search the Internet for yourself and check out the multitude of websites who are saying these factors make FX trading the easiest way to get into the markets and make money. Before you do that though, I ask you to not take this information at face value and approach it from a totally logical and objective perspective instead.

In life you can choose to take someone’s word for something and go do it their way, or respect their opinion, take it into account and go find out first hand, thus gaining vital experience for yourself along the way. This is why as an instructor, I shed the light of my experience on these dynamics of the FX markets with my students in class, showing them a way to go out there in a safe, low-risk fashion and get that all important experience for themselves. The Online Trading Academy Core Strategy is unique in its simple rules-based approach and allows us to see the market for what it really is, no matter what other factors may or may not be true about how the world of FX really works. The strategy recognizes one fundamental and undeniable fact and that is that it is the Institutions and Banks who dominate the market with orders to buy and sell currency which easily absorb the orders and actions of the retail trading public. When you understand that these institutional orders are what create imbalances between the willing buyers and the willing sellers, resulting in actual Demand and Supply falling out of equilibrium, then and only then, do we get movements in price. This simple and straightforward principle is independent of things like economic news reports, trends and spreads and when we learn to recognize what the imbalances look like on a price chart, then and only then do we get to the true moving parts of the market and gain real worthwhile experience.

As traders, we must focus on what is real in the markets and not simply go by what we feel or what we are told to be true. For sure there may be some of you reading this right now and asking the question of why you should take my word for it either? I say that is good. I am glad you are thinking this way. Don’t take my word for granted. Visit your nearest Online Trading Academy campus and see for yourself how we do things to get the very best experience of all. Stay objective and have a great trading week.

Take care and be well,

Sam Evans


DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.