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Forex Trading Tips: Better Never Than Late
Better Never Than Late
“All dogs are born with some degree of chasing instinct. Dogs will chase, we all know this; however, there are many reasons why dogs may give chase. The two common and closely related ones are often referred to as Play and Prey drives.”
From Basic Chase Instinct in Dogs by Karen Peak.
As 21st century citizens of the world, plugged continuously into the electronic heartbeat of the global economy, we love to think of ourselves as highly evolved and civilized human beings. With our Ipods and Blackberries permanently at our side, instantly aware of a Chilean earthquake, civil unrest in Athens, or latest skirmish in the Niger delta, we see ourselves as masters of the universe, able to control the world with one flick of the finger.
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But strip away the Hugo Boss suit, remove the Ermenegildo Zegna tie and kick off the Salvatore Ferragamo shoes and underneath all of our civilized armor we are much more like the Bushmen of the Kalahari desert than we like to think. We hunt and chase our prey just as they do, but we simply do it in more abstract ways.
Have you ever been involved in a bidding war on Ebay and wound up paying twice the retail price for some piece of second hand garbage? You are not alone. When men are placed into a competitive arena such as an auction, all sense of reason often leaves us and we are focused only on one task – catch and kill the prey. That instinct is so fundamental to our nature that we are not even aware of its power and no amount of formal education helps. That’s why multiple trading experiments (which are simply another form of a competitive auction game) involving engineers, Phds and physicists have shown near universal results of failure. Education is no protection from our instinct to chase.
The florist’s son did show up to pick asparagus, a job that simply entails walking along a line of stalks and cutting them into a basket. After two hours in the sun, however, the dough shaped boy clearly lost his enthusiasm and simply began to wander off the line, forcing other immigrant workers to clean up after him.
I bring this up because in this week’s video of my adventures and misadventures in ScalpLand, the biggest losses occurred when I was chasing price. Chasing price when you are short term trading is the fastest way to blow up your account. I know it’s tempting. Price is moving and you feel those profits running away from you, the way the Bushman sees an antelope running away from him on the great plains of Africa. But trust me, chasing price is a much bigger risk than chasing prey.
Short term trading is nothing more than a game of hot potato and if you are the last one to hold it you inevitably get burned. That’s why you can’t enter a trade half an hour after the news is out and expect to scalp your way to profit. To succeed in scalping you need to override your instinct and remember that when it comes to short term trading the rule is -- better never than late.