Forex

Most traders take price swings personally. They feel very proud when they
make money and love to talk about their profits. When a trade goes against
them they feel like punished children and try to keep their losses secret. You
can read traders' emotions on their faces.
Many traders believe that the aim of a market analyst is to forecast future
prices. The amateurs in most fields ask for forecasts, while professionals
simply manage information and make decisions based on probabilities. Take
medicine, for example. A patient is brought to an emergency room with a
knife sticking out of his chest-and the anxious family members have only
two questions: "Will he survive?" and "when can he go home?" They ask the
doctor for a forecast.
But the doctor is not forecasting- he is taking care of problems as they
emerge. His first job is to prevent the patient from dying from shock, and so
he gives him pain-killers and starts an intravenous drip to replace lost
blood. Then he removes the knife and sutures damaged organs. After that,
he has to watch against infection. He monitors the trend of a patient's health
and takes measures to prevent complications. He is managing- not forecasting.
When a family begs for a forecast, he may give it to them, but its
practical value is low.
To make money trading, you do not need to forecast the future. You have
to extract information from the market and find out whether bulls or bears
are in control. You need to measure the strength of the dominant market
group and decide how likely the current trend is to continue. You need to
practice conservative money management aimed at long-term survival and
profit accumulation. You must observe how your mind works and avoid slipping
into greed or fear. A trader who does all of this will succeed more than
any forecaster.