By Inyoung Hwang

Bloomberg.com

The U.S. dollar is the favorite currency of hedge-fund managers, with the Brazilian real a “distant second,” according to a survey by TrimTabs Investment Research and BarclayHedge. Fifty-nine percent of hedge fund managers say Greece’s sovereign debt crisis may spread to other European countries, though they don’t expect it to endanger the unity of the euro- region, the TrimTabs/BarclayHedge Currency Survey of Hedge Fund Managers also showed. Almost 15 percent see a “full breakup” of the zone. “Hedge fund managers overwhelmingly favor the U.S. dollar in the short term,” the report said. “This confirms other sentiment surveys and is consistent with aggressive buying of U.S. dollar index futures by speculative traders.” Fifty-seven percent of survey respondents were bullish on the greenback over the next three months, while 11.5 percent favored the real, the survey said. The yen and an “other” category led by the Australian dollar were each preferred by 8.2 percent, and the Canadian dollar was favored by 6.6 percent. The euro was preferred by 4.9 percent. The TrimTabs/BarclayHedge currency survey was completed between Feb. 11 and Feb. 22. Sixty-one managers, with average assets under management of $113 million, responded. TrimTabs is based in Sausalito, California. BarclayHedge is a research firm based in Fairfield, Iowa. To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net Last Updated: March 9, 2010 10:02 EST

“Being aware of uncertainty and understanding the nature of probabilities does not equate with an ability to actually function effectively from a probabilistic perspective. Thinking in probabilities can be difficult to master, because our minds don’t naturally process information in this manner. Quite the contrary, our minds cause us to perceive what we know, and what we know is part of our past, whereas, in the market, every moment is new and unique, even though there may be similarities to something that occurred in the past. Trading in the Zone

“This means that unless we train our minds to perceive the uniqueness of each moment, that uniqueness will automatically be filtered out of our perception.”

Mark Douglas,

Despite what many retail account holders think, professional traders don’t forecast.  The pro’s know that on any given day a market can correct, and that correction can turn into a reversal. For some speculators this may be cause for concern, not for a trader. Traders don’t forecast.

If a professional can definitively tell you the current trend, then by definition she can tell you at what point in price and time that trend changed. She can point to the very candle or bar which produced the set-up that provided the level which price moved beyond to produce the change/reversal. That definition is what lends the trader confidence in the decision making process and what makes forecasting, like opinions, unnecessary, and even a liability.  What the professional understands is that technically she is not making the decision, the market is. The market, through it’s highs, lows, and closing prices provides the framework which defines the critical levels that are the set-ups for coming directional changes. The trader just determines which time frame she is going to heed those changes on.

Jay Norris
www.trading-u.com

When I first got into forex trading, it was my first taste of trading fullstop. I hadn’t traded in stocks/shares/commodities or anything else. All this nonsense about forex making you a millionaire in a short period – I didn’t believe it, but I realised there was potential to make a lot of money.

What happened during the next 6 months was pretty much a disaster. Me and my mate opened live accounts and then started trading whatever system claimed to make the highest number of pips. Had I come from a trading background in general, I would have known this was a stupid mistake, but since I was totally new to trading, this idea of making X amount of pips in Y days for some reason seemed a possibility, albeit an indistinct one at that.

I didn’t really fall for the whole EA crap, I knew it’s impossible for a PC to print money 24/7, otherwise the whole world would be doing it, so I kept on trying different manual systems. But each system I tried made me a loss. I can name these systems here and now, some of them are scams, others I can’t really testify for, but that doesn’t meant it wasn’t my fault. $1k loss became $2k loss. So then I was playing catch up, with each new system I thought I’d recover my losses in addition to making substantial profits. $2k loss became $4k loss. Not good, not good at all.

Did I lose my shirt? In short, yes. My mates trousers also went missing. It was only until I lost a lot of money did I stop live trading. What the heck was happening? I was a graduate from a top university in the UK, my family expected great things from me, I was supposed to have a fully fledged career, and be focussed upon that, not spend half the night in front of a monitor staring at squiggly lines. It was at this point I knew I had to stop.

I’m a very stubborn person, but nothing’s more stubborn than the market, as I learnt and paid dearly for. However, I was stubborn enough to make sure I can get to a stage where I’m making small, consistent profits.

So I stopped live trading altogether, and soaked up as much info I could over the next year or so, whilst working a full-time job. Only until I made a consistent amount of pips in demo for a few months (whilst devising my own system), did I step out into the real world for the second time.

When I look back however, losing my shirt probably was a good thing for me. I don’t think I would have been so determined to become profitable otherwise.

That doesn’t mean that new traders can’t become professional traders unless they’ve lost their shirt. Nor does it mean every new trader who loses their shirt will go on to become a professional trader. Yes, a few will learn their lesson and become more determined, but others will just give up, whilst others will never learn their lesson, resulting in the loss of multiple shirts.

http://forexmagnates.com/losing-your-shirt-a-good-thing/