Forex Trading: Models Of Market Success
The set of various books on a theme of market success has been written. However, it is not clearly, how the skilled traders achieve the result. Some explanatory models are implicitly traced in these publications:
1) Psychological model – the market success, according to this model, depends on self-control and a psychological condition of the trader. Successful traders not necessarily possess the best methods of trade or any secrets, but apply a usual technique more consistently with smaller emotional intervention and consequently with the best management of risk. Development of trading success is function of development within the limits of this model.
2) Scientific model – according to this model, successful traders turn out first of all as a result of constant and in-depth study. The markets show schemes of cause and effect interdependence which through any time changes. A research role, in this connection, consists in opening these schemes and to trade in conformity with them. Such model, somewhat, is contrast to psychological model. This model assumes that as soon as you find out any inefficiency in the market it can be included in mechanic systems which eliminate any problem for the person and elements from trade process.
3) The model connected with understanding of latent formations – the given model underlines that the success in the market depends on understanding of the market. In the market there are certain graphical and other formations which don’t change eventually, but also they aren’t necessarily appreciable at first sight. The role of the professional trader consists in correct deciphering and application of these universal formations. It is connected not as much with research function how many with experience. Such approaches to trade as graphical formations, waves of Elliott or the Market profile aren’t regular approaches to trade and instead rely on interpretation of such market formations.
4) Execution model – in this model trade is considered as the activity connected with certain execution, like track and field athletics. Successful trade can be spread out to constituting skills and capabilities which can be fulfilled and improved thanks to intensive training and practical application. The result will be to a lesser degree connected with any researches or capability to interpret graphical formations, and basically with capability of fast accomplishment, in other words from perceptional and motor skills.
Undoubtedly each of these models possesses certain elements of true, and it is rather possible that all these models represent a part of that associates with concept of achievement of success in the market, it is not enough than differing from the descriptions of an elephant given by blind men in a known parable (when it allowed to touch different parts of an elephant).
People who took the decision to participate in forex trading must start from learning the basics of this market to make sure you do not experience problems with this industry.