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There are many new traders who will think, " Just show me the level to buy or sell at, and all will be good. I don't need all the other bla bla bla." Well, I can tell you that you will not trade profitably this way. I have seen it too many times in trading rooms, right in front of my eyes. A trade gets called by the trading room mentor, but guess what? No two traders in the room will get the same result! Doesn't make sense, does it?

Here's what happens:

• Some will get in early in fear that price will take off without them as it stalls before it hits the level.
• Others will be scared to take an entry if price moves hard into the level.
• More will wait for the level to be hit and for price to start to run in their direction.
• Then others will wait so long for conformation that price has turned that they now feel price has moved too far from the level and so don't enter.
• Some just won't enter as the last trade called in the room was a looser.

Once in the trade, we have some more issues:

• Some will exit before the profit target as they see price stall, and they don't want to give back their profits.
• More will hold on beyond the target as they got in late and want to make up the difference.
• Then there are those who close a portion of the trade before the target in case price reverses.
• We will have more who will add to the position as price moves in their direction.
• Others will drag their stop at a set distance behind price.
• And of course there will be those who don't bother with a stop.

And I could go on and on as to why that simple trade called by the mentor produces different results for everyone. Some will win, some will loose, some will break even, some will get a small profit , more will get the desired profit and some will loose BIG.

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Explaination

I explain the above behavior like this. We are all individuals and our belief system is built on past experiences. The two emotions that will tear us down in the markets are FEAR and GREED. And FEAR is much more powerful than GREED.

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The market will find the weaknesses in your character. You will need to strengthen those weaknesses before you can trade profitably on a consistent basis. The large players in the markets know peoples weaknesses and they will feed on them.

There are two ways to trade. Fundamentally (on information), and technically (using charts). I trade using charts. Learning to read charts will be 10% of the game, the rest will be building your character.