Beat the forex dealer pdf


Beat the Forex Dealer. Home · Beat the Forex how to beat a dealer in any casino · Read more Double Dealer: Crime Scene Investigation · Read more. com/fi other titles in the Wiley Trading Series please see ley. Publication. THE FOREX DEALER An insider's look into trading today's foreign exchange market Agustin Silvani A John Wiley & Sons.. Contenls NOTES \Iii Speaking Like a Dealer FX. dealings going on, Beat the Forex Dealer offers traders the market-proven manual, Beat the Forex Dealer brings to life the excitement of the FX market by.

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Beat The Forex Dealer Pdf

Become a day you have no capital beat the forex dealer agustin silvani pdf trade risky penny stocks and/or high risk options or you have a ton. Beat the Forex Dealer is a straight-forward book. It is honest and it tells you exactly how it is to trade in the Forex market. The author does not. Sign in to continue to My MapsE Study Guide For Beat The Forex Dealer An Insiders Look20 May - 52 secCheck Now: beat the forex dealer agustin silvani.

It is honest and it tells you exactly how it is to trade in the Forex market. The author does not sugar-coat anything and you will read about the difficulties of trading and staying on top of your game at all times. Only a small percentage of beginners persist and truly succeeds in the market and those are the ones who are aware that they have to work hard, learn constantly, and keep their head up regardless of a given situation. It will help you build up your knowledge on how this business really works and prevent the risk you might face if you dive right in without proper education. The goal of Beat the Forex Dealer free download is to prepare you for numerous obstacles you will face when you start investing your funds and minimize the risk as much as possible. As a matter of fact, Beat the Forex Dealer is a quick read and it is not your typical Forex trading guide. Agustin Silvani free book is candid and he truly wants to help you reach your maximum trading potential. The methods which are explained and presented in this book are the simplest and most useful ones you can find for novice traders, and you will be pleasantly surprised at how easy it is to start trading properly from the very beginning. Beat the Forex Dealer is an exceptional book and even though it is a trading guide of sorts, it surely is useful to traders of all levels. You will also love reading it since it is written in a completely different tone than the majority of books that deal with trading Forex. You can download Beat the Forex Dealer pdf here.

The ETXTraderPro product information option provides pertinent and specific information about the item in question. In this particular case the breakout above the most recent Swing High occurs within 5 to 6 candlesticks so the entry would have been valid albeit a few candlesticks later. We can provided you with internationally qualified trustees in Cyprus and set up family, business, investment or inheritance trusts.

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It doesn t charge fees for sending wire deposits but fees might be charged by the sending fund or bank provider It doesn t charge fees for sending wire deposits but fees might be charged by the sending fund or bank provider. Hoe vaker je het toepast binary options millionaire traders hoe sneller je het doorkrijgt. This way, all traders can use this robot feature available with IQoption and generate more profit, while also being able to select the approach that suits them best.

SPECS Because a p layer's pos iti oni ng on the food chain is dictated by their leve l of information and speed. It 's a spec ulator's duty to take so me of the bank's risk-free profi ts and pocket them for the mse lves. Although the odds are stacked aga inst th em.

Since C Bs love to sec specu lato rs get hurt. Hedge fu nds and other sophisti cated spec ulators. Since everybody feeds off the publ ic espec iall y banks and brokers this is not where you want to be. Find her and hire he r!

Althou gh you may think the ir c hances of success are Re tail traders in a ny market ma ke great contra ri a n indi cators.

Aft er a ll. Unfortunate ly these bright Slars seem to be few a nd far betwee n. The volume traded was almost len times the daily average. One day in late August however.. Creative's stock gapped hi gher the next day and traded as high as Why did Lhey choose La go against the lide? If the lawsui l had c han ged the fundam e ntal s of the industry forcing Apple to stop producing the ir product. On the back of the g reat news. Dealers were well aware of the news. The trend is obvious So what exactly abollt it is interbank?

The prices are not interbank. Their moti vat ion is obvious. In a scenario like this. Befo re the advent o f the cum. In the UK. Under the CFMA. US futures exchanges complained to the government that they were drowning under a mountai n of red-tape and o utdated reponing measures.

Throughout the s. Europeans were accustomed to dealing with foreign exchange all the time. In order to help the exc hanges strea mline their operati ons. The early years of the retail FX market featured a number o f rag-lag outfits consisting of over-caffeinated dea lers in liny Manhattan offi ces offering their clients spreads wide e nough 10 drive a truck through.

Nontransparent pricing. The FX market is an over-t he-counter market. It is standard practice in the FX world to trade against your clien t base.

You have no choice in the matter. Encouraging overleveraging. Because of these ad vant ages. The three or four firms that recog ni zed thi s opportuni ty and focused all of their anemian on their marketing efforts quickly became the market leaders and have neve r looked back. The dea lers that ran the shops knew that in a time of delayed q uotes and nontransparent pricin g. Unfortunate ly. Trading against your clients.

Becau se the orders where not immediately olrset in the market. FX brokers now had what they had been lack ing all thi s lime: All of the transactio ns they handled were off-exchan ge wi th the fi rm taking the other side o f all trades. These retail operati ons that have mu shroomed in the last fi ve years sit in a slill -to.

In a time when stock market euphori a was grippin g the nati on. Prici ng is not done th rough a central exchange. Like the bucket shops. In theory Lhey should act as littl e more than middl emen between the true interbank market and their reta il cl ient base. A cas ino may sen d a crooked deale r to stop the win ner's streak and retail FX firms may resort 10 denying service or complicating execution to such a degree th at it makes trading impossible. Jesse Li vermore. The bro ker may then wa it until the cl ient fl ow is surfi cient to o rrset with their market maker or Ihey may choose to hold the pos ition and effec ti vely trade agai nst their client s.

A "no dea ling des k" poli cy simpl y means that dealers ha ve been replaced with mach ines. The questi on that co mes to mind is. If anything. Casinos do not like winners a nd neither do FX brokers. Although the odds were stacked aga inst the bucket shop client. Unfair practices. I'd be surprised. A trade is a trade and a deal is a dea l. Although I am sure squeaky-clean shops ex ist somew here.

Arter al1. There is no such thing as a "long-term" relati onship between a market maker and hi s cl ients. Becau se the average survi val rate for traders is so low. If you are tradin g to beat your ne ighbor.

What could poss ibl y be wrong with rewardin g good traders? A lot. Since stati sti cs show that most traders blow. Since deal ers routinely change jobs and li ve on a daY-la-day basis or bo nU S-la-bonus.

According to Drcw Niv. Tradin g contests and drea ms of a large payoff pl ace people in direct co mpetiti on with each other. A dealer's j ob is a risky one. I ha ve yet to come across any.

Stories of bi g in vestment banks ripping off large corporate cli ents routinely make the news. The more accounts they open. They will try eve rythin g from huge internet adverti sin g ca mpai gns to direc t mail offerings. Beat the Forex Dealer 38 The simple answer is " no". Not much ski ll was involved in that brilliant strmegy. Jess than finished the month above breakeven a surpri singly high number. Card Stacking 39 bring up and focus squarely o n the dollars and cents. Going by the figures posted by onc prominent broker in their "mjni" trading contest.

Such is the case wilh their. Most probably these guys simply leveraged their accoun ts to the max. Out of four hundred participants. This type of game where lots of small accounts vie for a big payoff is nO new. The really interesti ng part comes when we sh ift the atlention away from the winners and focus instead on the results of the rest of the field. In this sense.

Layers between the retail trader and the interbank market Each layer represents an e tra cost. Out of the four hundred accounts. To thi s rate. Th is is all fa irl y common practice in the FX world. If this smell s fis hy to you. If a dealer notices that a bunch of good-sized stops have gathered nearby reme mber. If a cl ient co mplains. Large reta il FCMs have their own market makers. D ealer now-popular. If a broke r is convi nced that the curo is going higher.

We na iled you! Who else cou ld co nvince trade rs that paying twice the spread s imply to be Hat is act uall y of benefi t 10 them? These guys shou ld run for Congress! Naturall y. Card Stacking An example of price manipul ation. With two feeds from two different FX brokers Basicall y.

The fo rex dealer determin es the executio n pri ce. Un like regulated fu tures exchanges C BOT. The trading system could break down.

T hese days. According to the NFA. Since retail off-exchange forex trades are not guaranteed by a clearing organ iza ti on. Do not assume that because they proclaim to be large and "well respected" in the ind ust ry that that makes them upstanding guys. There is no central marketplace. In the event of a system failure. You arc relying on the dealer's creditworthiness.

A Google sea rch on the term "forex" wi ll quickly reveal all kinds of scam s and false promises made poss ible by la x government oversight. You should tak e a close and cautious look al the investment offer itself and continue to monitor any in vestment you do make. A sys tem fai lure may also result priority. AI the time of writing. Beware of in vestment sche mes thaI promise significant returns with little risk.

In loss of orders or order You could be a victim of fraud. As with any investment. The Co mmodit y and Futures Trading Co mmi ss ion. These are the guys that send crooked dealers and pOll zi sc hemes to jail. Because the ri se of the retail forex market caught regulators sleeping.

A futures commission merchant who is not in compliance with these requirement s has ten business days 10 achieve compliance or immediately cease do in g business and go imo liquidation. These fl y. It is just not very effecti ve. The CFfC is set up to regul ate exc hange-traded markets. As of now. Slowly but surel y thi s has begun to weed out most of the dangerously under-funded brokers. The o nly way to ensure the safety o f your funds is to o nl y trade with brokers who are well above their minimum capital requirement s.

Although thi s sho uld have scared the daylights out of their retail clients wi th milli ons of do llars in nonsegregated trading accounts. The problem is that alth ough it is a valuable instituti on. The subsequent bankruptcy of several small brokers th at took their client's mo ney with them fi nally led the government to rai se the minimum net capital requirement and begin to crack down on these woefull y underfin anced operati ons.

FX bro kers are raking in so much money these days hundreds of milli ons o f doll ars that they have even hired their ow n lobbyists to keep government at bay. Government ove rsight of such a complex and fundamentall y OTe market is very hard to implement.

In fact. We wi ll all be in 11 bette r place once a fair set of rul es are adopted that lets both brokers and traders flourish. How ca n the FX brokers defend the ir acti ons some of which ca ll for jail time in other markets and continue to tell th e ge neral public that intra-day FX trading is a great "i nves tment " and deemi ng it "easy"?

How can they co ntin ue to do bus iness with people that so li cit clients through fa lse marketing and fraudulent claims? New regul at ion needs to be put into pl ace that will guarantee transparency in pricing and safety of fu nds to the reta il cl ient. You know yOll have hit the big time when you can afford to bu y a lo bby!

Common sense tell s us that these "systems" are probably not very good to begin wit h. Hundreds of companies now offer clients great money-mak ing trading signa ls or programs. If the resuhs cannot be veri fied note that simply posting them on a website is not verifying them! Probably nol. To ensure that you are gell ing a fair shake. Hedge funds and private traders spend milli o ns of doll ars developing and safeguarding their trading systems.

Although the practice of. A dead giveaway is them asking you to trade with their "preferred" broker.

[PDF] Beat the Forex Dealer: An Insider s Look into Trading Today s Foreign Exchange Market (Wiley

LeI me put it thi s way: Looking around the internet I have also seen many " me ntors" popp ing up. For exa mp le. You want to steer clear of anyone making money from your trading.

When looking It third-party providers. If you had a proven system that accurate ly predicted winni ng lottery numbers.

Before enterin g into any investment scheme. Not just a coo l website. Beal the Fore1l: Dealer 48 mentori ng has l ong been establi shed in the markets. What is their motivation? To make their pupils succeed or to simply generate fees'? Ireasu rers.

The difference is that Lhey mak e their mOlley th rough their calls reputation not through your trading by getting referral money fro m the broker. They can be ex-prop lraders. The best mentors you ca n possibly find are friends or acqu aintances who m you know to be good Lraders. As the sayi ng goes. The motiva ti on there is si mple: This is a direct result of the increase in popularit y of forex tradin g and the lax overs ight by governm ent agencies.

The truth is that before these guys became popular FX guru s. Bas ica ll y lhey know how the rea l FX world. A whole commu nity of professional technicians. In the rea l world. I ha ve personally used several subsc ripti on services in the past.

When a new trader joins a firm he will pair up with a more experienced trader who w ill teach him how to become a great trader. A quick web sea rch is enough to show the full range of forex scams out there.

Now compare that to menLOrs offering 0 leach you for a fee. There are many great analysts and third-party serv ices out there. The bOllom line is thaI every g rem trader has paid their "t uiti on" to the market. If they are not will ing to take a hit. Success is the d irect product of hard work and determination. Opportu nity cost is a real cost for most traders with limited liquidity. Never take the ad vice of someone who is not willin g to put money behind their so-call ed analysis. The last thing you want to do is have your eq uity locked in a trade that is not movi ng whil e bypass ing other maybe betler trading opportunities.

Third-Party Services 49 works. Remember that self-confidence is a hallmark of all greal traders. RULE 1.

Beat The Forex Dealer

RULE 2. Most jokers on chat forums are sitting o n positions deep underwater and are desperate to get ou t. Even the big names routinely talk their book.

Never listen to anyone "talki ng their book". It is useless to tell the average trader that the euro will drop to 1. Any advice Ihey can possibly give you is losing advice and shou ld be used as a contrarian indicator if" anythin g. Most retai l traders do not have the luxury of trading with a Reuters or EBS feed.

Every trader should spend some time comparing different feeds and charts to see how they perform in fast-moving markets when reta il platforms regul arly freeze their prices and notice that demo feeds are different from li ve feeds. Your Sl OpS may be run or you may trade off manipulated prices. Your platform feed should onl y be used for placing trades.

The brokers may have initially gained the upper hand. By limiting yourself to your FCM 's artificially created bubble. As a trader. Having a stable and faithful charting appl ication is espec iall y vita l to all short-term traders. It may be worth the. Do a search for yourself and find one thaI suits you r needs. You do not need to hire a lawyer to fi le a complaint.

When you call you r broker to co mpl ain you may Slate that "my order disappeared! An easy way to do this is to take scree n shot s. You ca n find and down load a variety of applicati ons o n the web. Before choosing one.

Beat the Forex Dealer - Beat the Forex Dealer - Wiley Online Library

In addition. Clients may feel cheated when their orders are not fi lled correctl y. The number o ne reason is that St sli ghted traders find it difficult to take action against their broker owing to lack of ev idence.

Informati on abou t NFA's arbitration program is ava il ab le by calling Nl--"A at or visiting the Dispute Resolution secti on of its web site al www. Although most brokers wi ll usuall y fold when threate ned with official ac ti on. Profess ionals do it and so sho ul d you. If you wa nt information about filing a CITC repa ration s complaint.

An additio nal benefit to the indiv idual is that yo ur funds are held in segregated account s. The blmkIng pnces and constant sWings In equity are used by brokers to distract the trader and amplify the gamblIng instinct. Don't judge a broker's e xecution by their demo accounts. Bener yet. Demos are marketing gimmicks meant to lure people into trading. The C hi cago Mercantile Exc hange operates its own clearing house and virtu ally eli minates credit ri sk by acting as th e counterparty lO every transaction.

Try instead to think oC the moves in terms of pips. Always remember that the cost or switching is low. The execution on your demo account will be perfect. If it were only so easy! The actual decision-making process is the hardest pan of trading.

Thjs sounds obvious. The learning curve can be steep and uncompromi sing. For new traders this means establishing your survivability in the market and for experienced traders it means not fa lling into bad habits. It is much easier to place the blame on bad dealers. This leads many retail traders to "olilsolirce" the ana lyt ical work to a third party. All traders. Once we put as ide all of the nonsense handed out by brokers and guru s.

Obvio usly. What exactly does it take to post steady profits in thi s business? What trading ru les do professionals ad here to? What FX tricks exist out there that can help improve you r performance? T he second half of this book is intended to give active traders the information and tools they need to survi ve in the FX market and begin developi ng their own hab its and techniques that will turn the m into successful traders. By trading "against the grai n". Although trading is not easy.

Need les. Matching up your personal it y wi th your trad ing style helps to minimi ze these personal battl es. Do you prefer to play chess or video games? On the other hand. Some people make good archilcclS.

The good thing about money manage ment is that it is easy to implement. O ur inn ate fear of failure makes us place too much importa nce on not losing. I cannot make a jump-s hot to save my life. Ask yourse lf: How do I set my stops?

All too often traders choose arbitrary numbers that ha ve little to do with pro per mo ney management. Lon g-term success in thi s business is achieved by acc umul ating steady profits and occasionall y hitting the home-run trade. Th e market is bi gger than you. Whether trading a mechani cal system or in a discretionary fas hio n. Although good trading systems may be impossib1e to find.

There is no guaranteed way to make mo ney except coll ectin g spreads. If ancr several years you do nO see any improvement in your trading. We are bo und to be wrong and make mi stakes. When you think about it. Proper money management ma intains the all -imponant ri sk. Funni ly enough. If you consistentl y post large wi nners and losers.

Since the currency markets are not one-way streets. That is a lot of room to maneuver. To put that in perspec ti ve.. Trading position sizes thi s bi g in re lation to your account size mean th at you are essen tiall y trading yourself into a corner. This incident brought to life the ri sks of leverage to the corporate crowd. Most traders have had the frust rating experie nce of gelling Slopped-out.

The brokers love thi s. Flexibility in trading mean s giving yo urself options: Professional money managers generall y use no more than two to live times leverage.

By becoming overexposed to anyone position. If you are overleveragin g your trades. Trading small unti l you think yOli have all of the informa ti on and confirmat ion YOll need gives you the flex ibil ity to properly posi ti on yourself for the move.

The "more I bet. Beat the Fo rex Dealer 60 to your entry at some po int later in the day. As YOll may well know.

Look back on your trad ing and see how big your losses typicall y are. To properly trade mult ip le lots you must fi rst calculate the tota l amount you are willin g to risk before you enter you r trade. Th is is the same type of ana lys is that profess iona ls regularly run on the ir tradi ng.

If you find out it is too co ld. Avo id ing th is trap simp ly means learn ing to manage your lo!. The only way to gel around these sometimes arbitrary market movements is to Slay flexib le and trade mu lt ip le lots. Besides not being very wise it has a negative expected outco me when you take the spread in to cons ideration.

Trad ing in this way also means mi ss ing ou t on far fewer trades when compared to the all -in approac h. You should try to thi nk of your in itial entry as your lOe testing the tc mperal llre of the w. If you are an intra-day trader and eve ry time you lose you end up taki ng a 3.

Before he knew it. Becoming a Great Trader If you don't think trading mistakes will happen to you. Tha i bei ng said. Although the "value investo r" mindsel may pay off in equ ities.

Broadly speak ing. In their think ing. FX traders can be div ided into the funda me ntalist and the technical crowd. CUf f e nt account imbalances. Thi s may exp lain why eco nom ists' forecasts are undeni. The tech ni ca l c rowd. On the one hand. Much like eq uity managers who like La download "underval ued" co mpan ies. Althoug h the fun damentalist approach may seem li ke the more logical way to go. After an exhausti ve search and counlless regressions.

Imagine yourse lf silting at a stop wa iting ror the bus to come. Lon g Term Capit al Management and ot her see mingly advanced hedge funds were done in by these "sigma-ni ne" events. If the buses run according to schedule. It is certa inl y not due to a lack of intelligence or computing power on their part.

More sophisti cated models may take in w account the ave rage time it takes for a bus w arrive. To prove thi s point. If that is the case. In order to understand beuer why all probability-driven model s have limi tations that will eventuall y lead them to fail spectacul arl y. Of cou rse. Unfort un ate ly most.

Yet I still have not figured out how to get that on my Bloomberg.. Most ri sk models still in use today co nsider the one-day October market crash to be a one. The longer you wait. Today [just had a loss that's a nine s igma event!

That' s the third time thb year! Rest 3ssured that after a sufficient amount of time has passed. You kn ow the frequency of the bus service every ten minutes. As computati onal power increased over time. Many funds includ in g ours acti vely front -run other people's models by anti cipating the trading signals their systems will generate and then positioning them selves for the slight pop created by their executi on. Technical trad in g proves espec iall y attractive to retai l traders because it offers a way to " make sense" oul of a sometimes se nseless market.

Dealers know thi s. Find something thilt works for you and stick with it. The clear benefit that sys tematic trading gives us is order. Although in the end your "system" mayor may not prove to be profitable. A a time when quantitative trading has been fin all y accepted by the general trading com munit y.

We know that no strategy is always profitable. If everyone follows the sa me indicator. Ha ving a clear. Pickins the Right Approach 6S one except the model. A kind of "chicken and egg" scenario has emerged and. This criti cal fla w is essenti all y what makes model-dri ven trading approaches blow-up spectilcul arly. What we now know is that markets are effic ient, but they are not perfectlyefficient.

Since prices are man-madecreations thaI reflect our biases as much as they do economic reality, markets maystay in a slale of disequilibrium for a long time when the very reason for downloading prices going up in turn leads other people to download.

Psychology mailers. The eerie similarity between the crash of and can probably be att ri buted to traders in using the past as a wny of predicting the future.

Source: Lope Markets Traders that overlook th ese behavioral aspects end up in troubl e when confrontedwith tumultu ous and emotional markets. His farewell letter to in vestors pretty much says it all :The key to Ti ger's success over the yea rs has becn a steadycommitment to downloading the best stocks and shorting the worst. In arational environment, thi s strat cgy functions well. But in an irrationa lmarket, where earnings and price considerati ons take a back seat tomouse clicks and mo men tum , such logic, as we have learned, does notcou nt for much.

I To fade a move is to trade against the prevailing direction. On Markets 7 From a trader's perspective. If irra-tional investors make a bundle o n the way up, while ratio nal in vesto rs lose theirshirts shorting the move, then who is rati onal and who is not? Markets are notrational or irrat iona l. As longas people are downloading and selling, short-term speculato rs are indifferent as Q therationale behind the moves because they know there is mo ney to be made on bothsides of any trade.

All that traders care about is maximiz in g their profits by posi-tioning themselves in adva nce of the next move, while acade mi cs oflen miss theforest fo r the trees by be ing so far removed from the trading fl oors of the world. Of all financial market s. Since a market thi s free and liquid is typ ica ll y hard LO out-guess. The FXmarket has never been a value creator. AUS portfolio manager downloading Japanese stocks or an Ital ian co mpany acquiri ng rawmaterials from Brazil both inadvertently become FX participants.

The portfolio managersimply needs the yen to download the stocks and the company needs do llars to download thecoffee. This type of behavior breeds inefficiencies eage rl y exp lo ited by more activemarket panicipants, and fonunately for FX traders small arbitrage oppOI1unitiesstill abou nd.

Research and analysis in FX proves valuable because the currency marke t isdifferent than Wall Street. The interbank market is by no means a perfect market 10 Beal the forex Dealers ince information is not freely available, market access is restricted , manipulationtakes place.

The FX market is different than other markets. Profitable trading strategies do exist andcan be found. To understa nd a bank 's motivationfor getting involved in thi s market, all you have to know is that by combining alarge FX dealing desk with a decent prop trading group, pretty soon you will betalking about billions in profits. These types of numbers have long made FX theplayground of on ly the biggest and baddesl globa l banks, and because at its corethe FX market continues to be a credit market.

Marketshare 1. Deutsche Bank Goldman Sachs Bank of America JPMorgan Chase Merrill Lynch The interbank market operates on thi ssomewhat unusual principle.

As you may wel l imagine. Forthis reason, big banks prefer to deal with big banks, and small er fish are essentiall yshut out of the FX pond. As a res ult. Technology has managed to open up thi s ti ght-knit grou p somewhat.

The rea lity is thatthe sa me small gro up of banks still co ntro ls the FX market. More oftenthan not thi s leaves those with limited access to information at the mercy of theirbank dealer. Insider trading. Unlike exchange-traded markets NYSE where a market maker has aresponsibility to quote the Same price to two different parties, an FX dea ler mayquote hi s cl ients whatever price he wi shes.

Theseinefficiencies, of course, all play into the hands and pockets of the brokers. Dealers are free to behave in thi s way because they are very often the only gamein low n, and they know that there is not much customers can do about il. In thesa me way that you and I know ingly get ripped off by the exchange booth guysat the airport, traders know they arc gcning short-changed but often have linlerc ;ourse. If Go ld man is the on ly one wi ll ing to take your trade at that moment,you ca n either take it or leave it; it is as si mpl e as that.

Although theorystates that in vestors should not be capable of beating the market in the long run,people like Paul Tudor Jones l are happy to go agai nst conventi ona l wisdom byconsistently beating the market year aner year.

Eit her their success is merely theresuh of a stati stical fluke or great traders are simp ly a breed apart. The mark of a great trader is their abi lity to walk the wa lk and talk the talk. Whi le most peop le actuti ll y find thal all paper they make great trad ing deci sio ns,when real money beco mes in volved they soon lose the upper hand.

That is becauseas soon YOLI enter the market, you beco me emotio nall y artached to you r posi tionand the switch from paper profils to real doll ars and cents clouds you r Lhinking byinserting doubt into your reasoning. Think about the past in vestment decisions youregret the most. They usua lly involve sou nd investments that you p ull ed the pl ugon too SOOI1 I knew I shoul d have held on to that property in Florida!

Either way, the errorin judgment is frequent ly caused by the emoti onal ru sh brought on when sw itchingfrom perce ntages to greenback s. This mental toughness is the reason g reat tradersare often referred to as having ice-water running through their ve ins o r havingpri vate parts made out of steel.

Trading is one of the few profess ions l hal enable you to quantify exactl y howgood you are. Usua ll y it is througha com bination of peer respect.

And how do they know if Ihey had a good or bad day? Prob lems1Pan of the University of Virginia hcdgies. Never a down year. Of note. Now imagine being able 10 look at you r scree n at he e nd of yourshift and let it tell you how your day was. For traders, the measuring stick issi mpl e: mon ey.

The lllorC you make , the better you are at your job. If you mademorc than the guy to your right that mu st mean that you are better at your job thanhe is, and if you lost money today thal means you had a bad day at work. Thisturns trading floors into pure meritocracies, and those that make money have thepower.

Unlike investing, where the focus is on creating wealth e. Trading, like poker,can be described as a zero-sum game. If you are winning then someone else mustbe losin g. Anotherinterestin g quality about traders is that proficiency with numbers docs not automat-ically translate into positive trading results. The ability to look beyondthe obviolls facts and figures , to think of the market not only from an objectivestandpoint but also from a subjecti ve view.

The ideawas simple yet brilliant: in a time of slow communications, courier pigeons cou ldbe lIsed to tran sm it gold prices across the Eng li sh Channel, giv in g you a day 'shead start on the market and opening the door 10 arbitrage opportunities.

Whenthe price was lower in Paris, they would download it there and se ll it in London. Their advantage was information, which was thoughtfull ytransformed into profits.

Deal ing with ullcenainty can also mean being pro-active ;:lnd forcing your oppo-nent 's hand. When asked about hi s playing.

Ed Lasker. What movedo they fear the most? What wi ll they do if prices go down? Market panicipants and pawn shops know that it is much easier to rip-offso meone in trouble than to make money through you r ow n tradin g skills, so overthe years they have evolved into effic ient killing machines that would make Darwinproud. If the market catches a wisp of a hedge fund III trouble. Aug 7 t4 2.

Antic ipati ng highe r natural gas pn ces. At this point. The sudden nood of supp ly gets the market 's attention, and the NYMEX boys soon real ize that Amaran th is siui ng on a huge long position. Fundamem,tis are pushed aside ilS traders move in fo r an easy play.

Not su rpri singly. It bailed them ou t cash in their positions ror great gains. If Amaranth had not gone balls-oll tlong on natural gas, for exampl e. Forex traders are a unique brand of specul ator with an alm ost monasti c devotionto th eir pro fess ion, working obscene ho urs and concerning themse lves wi th globalmacro eve nts. What effect will the Tokyo eanhq uake have on the Swiss franc?

How will the US do ll ar react to infl ati onary sig ns coming oul of Germany? Tryex plai ning how you make a living to a stranger or you r spouse and they willlook at you as if you are crazy. The abili ty to select. Th rough the eyes of a forex trader every asset trade isessenti all y a bet o n exc hange rates.

The world' s eco nomies are now one g iant interconnected machine, and the greasethat keeps the gears runn ing smooth ly is foreign exc hange. Legendary FX tradershave made their careers by fi gu rin g out. This clairvoyance often instill s a levelof se lf-confidence that would hu mble professio nal ath letes. In A Rare Breed 17 Why is it a bad idea to give your star trader the keys to the backoffice?

The Sumitomo Corp. Unfortunately for Sumitomo, his 10 year career was mostly filled with bogus contracts and fictitious entries meant to hide his mounting losses.

Nick Leeson. Star trader for Barings Bank. John Rusnak.

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