At The Top Of Your Game With Currency Trading
I had an idea about writing an article about punters. My first task was to find a sensible definition for the term in relation to forex trading - the subject for my piece. There was far too many definitions of the word 'punt', but my searches for 'punter' yielded the one I required. According to a British source, a punter is a person who speculates money, often against a bookmaker in the form of bets.
Having discovered what a punter is, I needed to know what a punter is forex trading was. I had not come across any sort of formal definition. Traditionally, a punter refers to someone who trades on instinct, often against market trends. This follows the British definition for 'punter' that I had found, which implies an attitude more akin to gambling than trading.
I occasionally find myself wanting to punt, even after decades of forex trading. I can come up with two competing ideas as to why this might be. Firstly, I started my career as a bank trader in the days before price action could be tracked on screens. We had to trade mainly on instinct. Secondly, with the advent of electronic trading, prices can now be watched in huge detail, and one can easily be drawn into trading based on watching prices rise and fall. Whatever the reason for the desire to punt, I am too disciplined to do so. I know that long term success cannot be gained from punting, no matter how good you think your instincts are.
When trading simply on instinct, one often gets early profits when you are right, but the losses are often too late when you are wrong. These types of trades are not based on risk/reward strategies, which have defined targets and stop points. These trades are based on using gut instinct to hope that you have timed the trade to coincide with the top or bottom of the market.
Today there was an event that encouraged me to begin to write this article. After the bank of Canada announced its decision on monetary policy - to keep rates unchanged - the USD/CAD firmed. The previous day, the rate had closed at 1.0298, after a sharp fall in line with a weaker USD. Before the announcement, trading was around 1.0310. However, afterwards, the price began to firm and punters were instinctively looking to sell at each pause. This was also my instinct, but experience told me to look at the charts and I abandoned the idea. Punters were lured into trading as the USD/CAD paused at various levels, but it carried on rising higher, until peaking at around 1.0525. Some punters may have been fortunate enough to gain a few pips, but the price action offered a poor risk/reward. The losses far outweighed the gains if the timing of entry was not perfect.
You cannot guarantee long term success by either punting or any other form of forex trading. If you currency trading is approached as though you were in a casino, in the long-term you will get the same results as though you were gambling in a casino. When forex trading is approached with solid business strategies, with good analyses, proper risk/reward rations and money management in place, the chances of success are much improved. - 23212
Having discovered what a punter is, I needed to know what a punter is forex trading was. I had not come across any sort of formal definition. Traditionally, a punter refers to someone who trades on instinct, often against market trends. This follows the British definition for 'punter' that I had found, which implies an attitude more akin to gambling than trading.
I occasionally find myself wanting to punt, even after decades of forex trading. I can come up with two competing ideas as to why this might be. Firstly, I started my career as a bank trader in the days before price action could be tracked on screens. We had to trade mainly on instinct. Secondly, with the advent of electronic trading, prices can now be watched in huge detail, and one can easily be drawn into trading based on watching prices rise and fall. Whatever the reason for the desire to punt, I am too disciplined to do so. I know that long term success cannot be gained from punting, no matter how good you think your instincts are.
When trading simply on instinct, one often gets early profits when you are right, but the losses are often too late when you are wrong. These types of trades are not based on risk/reward strategies, which have defined targets and stop points. These trades are based on using gut instinct to hope that you have timed the trade to coincide with the top or bottom of the market.
Today there was an event that encouraged me to begin to write this article. After the bank of Canada announced its decision on monetary policy - to keep rates unchanged - the USD/CAD firmed. The previous day, the rate had closed at 1.0298, after a sharp fall in line with a weaker USD. Before the announcement, trading was around 1.0310. However, afterwards, the price began to firm and punters were instinctively looking to sell at each pause. This was also my instinct, but experience told me to look at the charts and I abandoned the idea. Punters were lured into trading as the USD/CAD paused at various levels, but it carried on rising higher, until peaking at around 1.0525. Some punters may have been fortunate enough to gain a few pips, but the price action offered a poor risk/reward. The losses far outweighed the gains if the timing of entry was not perfect.
You cannot guarantee long term success by either punting or any other form of forex trading. If you currency trading is approached as though you were in a casino, in the long-term you will get the same results as though you were gambling in a casino. When forex trading is approached with solid business strategies, with good analyses, proper risk/reward rations and money management in place, the chances of success are much improved. - 23212
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posted by X - Men @ 9:51 AM
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