I have been trading forex for only a few years. Six, to be exact. But already the forex market knows me like one knows an intimate friend. I have studied the forex market, and read around it. But still it knows the direction my every trade is going to take, and even how far each trade is going to go. The market knows exactly where my stop-losses are, and hits them without fail. It also knows where my take-profit is, and stops just a few pips short before turning back. It knows that when it turns, I will follow it. As soon as I do that, the market stops and turns again. And heads for my stop loss.
I have paid attention to the fundamentals. I have checked chart history and I have checked the forecasts. I have listened to, and watched, the news. I listen when Mario Draghi speaks. I listened when Ben Bernanke spoke and now I listen when John Bellows speaks. I follow developments in Greece. But still the market gets me into a spin. If the news is right, the market has already factored that in. So it fails to move as I expect. If the news is a surprise, the market gets spooked and runs in a direction opposite to my trade. If it is a rumour then the market pauses, and turns. And, yes you guessed it, heads for my stop-loss again!
I have used the technical indicators available on Dukascopy; the cycle indicators, the momentum indicators, the pattern indicators, the volatility indicators, and many more. As they say, before we knew it by sense, but now we know it by science. But instead of liberating me, this choice often induces paralysis. I have relied on my own personal views too. Still the market whipsaws me, counter-trends me, ranges against me and generally knocks me about. And it always heads for my stop-loss. At times the indicators are just as confused and just as surprised as I am when the market throws the house out of the window.
Since it is said ears that do not listen to advice accompany the head when it is chopped off, I have been to workshops, seminars and I have participated in webinars. I have read all about candle charts, bar charts and time-frames. I have read about risk and money management, the win-loss ratio, and leverage. I have read about traders’ psychology, and I have taken note of the things I am supposed to do and those that I am not supposed to do.
Don’t move your stop loss, I have been told. Yeah, right. Stand and get hit by a speeding train. So I move my stop-loss. And it gets hit anyway. How am I to know how long or how fast the train is? Stop using indicators, price action is best they say. So I stop using indicators and then I become directionless. Well, he who does not know where he is going will never know whether he has arrived. Just place your order and forget about the trade. Walk away. As if that is possible! I find myself logging in again minutes after logging off. Just to check. And sure enough, I find price heading for my stop-loss. I close at market to cut my losses. The market pauses, hesitates, and then turns in the direction from whence it came. What must one do? Run away from the rain to hide in a pond?
It is tough to take advice from men with missing fingers. Most of those who promise huge profits based on systems they are selling, most of those whose workshops I pay to attend, most of those running websites for which I must pay to get ‘cutting edge’ systems that will keep me in profit, seem to be making money more from these activities than from actual trading. All those thundering and torrential commentaries. Rather, the mountain has thundered and delivered a small rat! When you connect the dots, you come to the conclusion that the market must have known their game too and taught them a few lessons.
In hindsight, the charts look so clear, so obvious. There is the trend I should have followed. Here it was ranging. And here price was clearly going up, and there clearly going down. There are the trades I should have taken. There are the ones I shouldn’t have. Here comes the whipsaw. The scavengers are coming, time to exit! All in hindsight. But where was my foresight, my eyesight even, when these things were actually unfolding on the charts daily before me? Oh, well; these charts have the fake friendliness of the salesman con-artist.
So just like a close friend this market knows me. It knows I will see a trend where none exists. It knows I will over-leverage when I shouldn’t. It knows I will get angry and seek revenge when I shouldn’t. Whether the egg crashes on the coconut or the coconut crashes on the egg, it is the egg that suffers. The market knows, for certain, that I will continue trading. And that even though I will lose, I will always come back. Is this market maybe studying me all the while that I am studying it?
I am sure that there is out there a trading system that will one day put the money in my pocket. I just need to find it! For forex trading can’t possibly be just about airbrushed and mass-marketed fantasies. Nor can it be one of those urban legends that grows in the re-telling. What else explains the fact that I know some forex traders that look tall when they are sitting down from the size of their wallets. One day, I am sure, my cup shall too runneth over into mine saucer.