How long should a man’s leg be?
In this episode of Truth About FX, Walter breaks down the age-old question: how is the market created? Or, is it really something that can be manipulated? If so, how can you take advantage of it?
And what you could learn from Abraham Lincoln — wait, what?
Download (Duration: 04:50 / 5.53 MB)
In This Episode:
00:33 – the famous question
01:30 – cheeky way
02:08 – question and challenge
04:10 – weeding out
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. What creates the biggest moves in the market and how can I profit from them?
Walter: This reminds me of the question that they asked Abraham Lincoln. Do you remember that famous question, Hugh?
Walter: They say, “How long should a man’s leg be?” “I suppose long enough to reach the ground.”
I mean, this is sounding like where you’re going to get depending on who you ask. You’re going to get a total… It’s a rainbow, an assortment of flavors. Some people are going to tell you it’s the news.
For example, bank announcement. Central Bank unemployment, elections, the London open, market goes too far and it has to reverse or surprise. This is what makes the market. This is the real cool thing that makes the market.
Is that everyone has their own ideas about where the market’s going and without though, if everyone thought the same and we wouldn’t really have any disagreement on price, people would not be exchanging anything, really.
This isn’t really… To me, I don’t know how to answer this. I know that the cheeky way to answer this say momentum. There isn’t, really. I guess, this is one of those things where, like I said, I would just refer to the Abraham Lincoln question.
I really don’t think that anyone is in authority. Actually, this is a red flag. If somebody tells you that x is the reason why you get these big moves in the market, I would question that.
I would question anything, really, just anything I say, anything Hugh says, question it and see for yourself. That is a great way to live instead of allowing people to tell you what to believe.
If someone is telling you, “Look, this is what happened. This is what creates..” I would definitely question that and challenge that because it is probably not true. It maybe true to them but it may not be the actual truth.
Like I said, this is what creates the markets. Unfortunately, that is not an easy question to answer.
Hugh: That is a pre-beginner question, I think. I mean, would you say that it’s more about putting yourself in a situation to profit from those big moves rather than just trying to predict the move itself?
Walter: Yeah, I think you’ve nailed it. We have to get away from our thoughts and what we think should happen. Instead, just look at the chart and say, “What does the chart show us?” That is really what the critical thing here. Hopefully, that makes sense.
Just trading what you see is something that is sort of like very zen and you have to think, “Well, how can I do that?” That is something to strive for because the best traders, they do that. They do not allow any distractions.
I have another friend, a bank trader. He said his biggest thing is weeding out all the information that he gets from the bank. That is his biggest concern. He has so much information.
Information overload that they get as traders. He actually has to like put blinders on and just stay away from that because it can be so overwhelming. I just think that to me, a lot of people, they over complicate it.
You can simply trade what you see. If you are a technical trader, it should be your goal, to basically trade what you see.
Hugh: Yeah, makes a lot sense. Thanks, Walter, for clearing that up.
Walter: Thank you.