[Ingot54]

One of the things we have to do in order to assimilate new ideas is to come to the table with an open mind, and an enthusiasm for the topic.

In order to show you the colour of the slate we are about to write on, let me tell you a story.

Trader Joe decides he wants to be a currency trader. He heard his popular buddy Trader Bill telling the party scene at the recent barbecue gathering how he made $1200 in 45 seconds when the NFP data was released earlier that day. Not only that, Trader Bill said it was as easy as falling off a log – just open the account and click the orders through to the broker electronically.

As a matter of fact, Trader Bill had a dozen “good luck” stories about his successes as a day-trader of currencies. Trader Bill enjoyed quite a reputation as a high flier, and as Trader Joe listened his mind went into over-drive … new car … work from the yacht … just a few hours a week … extended vacations … aah … the good life.

If Trader Bill could do it – why not Trader Joe?

Why not indeed?

One thing Joe did not realise was that his friend Bill was not letting the truth interfere with a good story.

Oh yes, Bill was telling PART of the truth … in fact he HAD made $1200 in 45 seconds. But Bill failed to tell how the account balance finished at the end of the day. He did not mention that his position had reversed by 50% with the next 20 seconds, cutting his profits to Just $550 … less spread of 3 pips.

In fact Bill really had not had a good day.

He took a position on the AUDUSD, which had been flying recently, but he called it long when he should have gone short, when the RBA decided to keep interest rates on hold – a move that went against the consensus of opinion.

After that he gained 40 pips on a short position on the USDCAD, but gave it back on the USDJPY when he decided the current trend would continue, and forgot to account for the influence of the People’s Bank of China raising interest rates to try to take the heat out of the stock exchange growth in China.

In fact, Bill had stressed and pored over his charts and data, news-feeds and broker calls all day, and half the previous night. Bill really needed the barbecue party to chill out a bit. He loved to tell his stories, as if he needed to convince himself that he really was doing OK as a trader.

The other things Bill didn’t mention was that his wife loathed his involvement in the Forex markets – their marriage was empty – but Bill maintained he was “doing it for their future.” Little wonder that Bill’s wife was never with him at these functions – she hated anything to do with trading – period.

But this stuff was concealed from Joe – all he could see was dollars … and the good life … freedom from his boss … and so on.

Joe took Bill aside and asked him how he too could get involved in currency trading.

If you were Bill … what would you tell Joe?