[B]iloveforex, [/B]
I agree with both Phil and Sweet Pip. You don’t need an education in economics in order to succeed in forex trading. You don’t even need to pay attention to scheduled economic news releases, such as Non-Farm Payroll reports, or CPI figures — when these reports are due, just get out of the way, and wait until the dust settles.
The best traders are not trained economists, mathematicians, computer scientists or engineers. In fact, experts in those four disciplines actually have a disadvantage, compared to their less-educated brethren, when it comes to trading skill. The reason for this is somewhat counter-intuitive. Any discipline which trains you to use [B]the correct procedure [/B]to get [B]the right answer[/B] will handicap you as a trader. Trading just doesn’t work that way.
Engineers are at the greatest disadvantage, because their careers are based on designing things to work in precisely the intended way. Engineers who attempt forex trading struggle with the seeming randomness and irrationality of the market. The idea that success is defined as getting it right 60% or 70% or 80% of the time, is contrary to everything engineers have been trained to do. Imagine an engineer claiming professional success based on the fact that more than half of his buildings and bridges didn’t fail.
Economists — to address your question more directly — are probably more tolerant of probabilistic outcomes than engineers are. But, they still labor under the illusion that there is some predictability to the future. The forex market teaches us that predicting is for fools.
For those trained to believe that outcomes can be determined in advance, immersion in probability theory and/or poker is likely the best remedy. An engineer who can shift mental gears, and learn to play poker successfully, can likely become a successful forex trader.
As a math major, your emphasis on probability and statistics will be an asset, not a liability, in the uncertain and probabilistic world of trading.
So, if engineers, economists and other highly-educated folk are not predisposed to forex success, who is? I once heard a forex trainer say that the people most naturally inclined to succeed in forex trading are: pilots, women and children. He gave the following explanation.
[B]Pilots[/B] are trained to trust their instruments and to deal with adverse situations according to established procedures. Applied to forex trading, this translates to trusting your strategy and your indicators, and following your trading rules.
As traders, [B]women[/B] are much less insistent than men on being proven right, when trades go against them. (In dealings [B]with men[/B], on the other hand, women are always right! If you doubt that, just ask them.)
And, finally, [B]children[/B] are perfectly comfortable with the cause-and-effect aspect of video games, without asking “why” the game unfolds as it does. And this translates directly to an affinity for rapid, electronic trading in which price-action is everything, and the drivers of the price-action are irrelevant.
I’ve never known whether that trainer’s spiel should be taken at face value, or whether it was all tongue-in-cheek. It certainly entertained the class for five minutes.
Of all the academic subjects you could study, to enhance your trading skills — in addition to probability theory, which you are already studying — I think psychology (and maybe game-theory) would be near the top of the list.
Good luck with your schooling, and stay in touch.
Clint
