Forex

Suppose that you are a space traveler. You have just landed from a faraway planet, and you
find yourself in a room where a chess set has been arranged on a table. You want to
understand exactly what is going on in this strange Earth. You examine the chess pieces
individually and notice that there are several different shapes and sizes. You want to really
understand, so you do an "electron analysis" of each individual piece. You know the exact
location, size, and makeup of each piece. You thoroughly understand the makeup and the
content of the entire set. But unless and until you understand the process of playing chess, you
will never understand the game and its significance will be lost on you. In over four decades
of observing traders and trading, I have come to the conclusion that most traders approach the
market with the same orientation as our fictitious space traveler. Both are primarily concerned
with content as opposed to process. Our space traveler will never understand the game of
chess until he observes two people playing and competing against each other. This is not
necessarily bad; it just doesn't have a great payoff. We traders do it with each other when we
ask:
• How much did you make this month?
• Did you go long the gold?
• What kind of car do you drive?
• Will you show me your P&L statements?
• Can you give me someone who is using your approach profitably?
• Did you know that this market is heavily oversold?
All the above examples center on content rather than process. Both my scientific background
and my experience in trading have convinced me that the primary difference between winners
and losers is whether they focus on content or process.