Simply put…knowing the basics just isn’t enough – you know that. Especially when you consider that you’ve got money riding on it.
You’ve got to spend more time studying, observing, watching every second, in order to truly get your head wrapped around “how things really work”.
If it’s a particular stock or currency pair you’re interested in then….get it on your screen, not just a couple of times a day but ALL DAY and “really see” how the thing trades. See how it reacts at any number of moving averages, check it out on multiple time frames, draw those horizontal lines of support and resistance, watch for spikes in volume at given times of the trading day.
Throw those “bolinger bands” on it for example, and see what happens when price breaches the lines. Check a simple RSI and see what levels the thing starts to turn on. Brush up on your japanese candlestick knowledge and learn to identify significant formations.
Follow a given stock, currency pair, or any asset for that matter for a FULL WEEK no MONTH! Every single second that you can bear staring at the computer so when you step out onto the field, you take EVERYTHING you possibly can with you. KNOWING you are about to face the toughest team on the planet.
These guys have been playing professionally for YEARS!
Practice your entires, even if just in your head, then check back to see if you’ve improved over the last time.
Study those fundamentals so you’ve got a heads up on what type of price action to expect “before” announcements are made. Take Sundays to “put a plan together” for the following week, then see if things play out as you’d expected. If not – do it again next Sunday.
I can tell you from experience..there is no other way around it. The odd “hot tip here or there” will always be a possibility but to consistently “round those bases” you’ve got to dedicate considerable time and effort. You’ve got to stick with it.
I think you can do it….but the question really is – do “you” think you can do it?
Well enough with the motivational speaking – you know what I’m getting at. If you are here to learn then I suggest you “step it up a bit” and start chewing on some of this in your down time. There is a never ending list of things to study, and the great part is…the market is likely gonna be there forever so – you’ve got time!
I’ll be in the kitchen if you need me.
The Real Work Begins When Markets Close
Look, while everyone else is glued to their screens during market hours hoping for that miracle breakout, the pros are doing their homework when the noise dies down. You think George Soros made his billion-dollar pound trade by watching 5-minute charts all day? Hell no. He spent months understanding the fundamental imbalances, the political pressures, and the technical setups that would eventually converge into that perfect storm.
Here’s what separates the wheat from the chaff: your after-hours analysis routine. When London closes and New York winds down, that’s when you pull up your charts and start connecting the dots. Did EUR/USD respect that 1.0800 level you marked last week? How did GBP/JPY react when it hit that 50-day moving average? More importantly, why did it react that way? These patterns don’t just happen in a vacuum – there’s always a story behind the price action.
Correlation Analysis: Your Secret Weapon
Most traders treat currency pairs like isolated islands, but smart money knows better. USD/JPY doesn’t move independently of the 10-year Treasury yield, and EUR/USD doesn’t ignore what’s happening with DXY. Start plotting these relationships on your charts. When the dollar index breaks key resistance, which pairs are going to feel it first? When crude oil spikes, how does that impact CAD crosses?
Here’s a practical exercise: pick three major pairs and track their correlations over a month. Notice how AUD/USD and NZD/USD move in tandem most of the time, but watch for those moments when they diverge. That divergence often signals opportunity. Maybe Australian employment data was stronger than expected, or New Zealand’s RBNZ shifted hawkish. These correlations break down for a reason, and understanding that reason is where the money gets made.
Central Bank Rhetoric: Reading Between the Lines
Every word matters when Jerome Powell opens his mouth, but most traders only hear the headline. You need to dig deeper. Start following FOMC meeting minutes, not just the rate decisions. Track the voting patterns of individual members. When three dovish voters suddenly turn neutral, that’s your early warning system for policy shifts.
The same goes for the ECB, BOJ, and BOE. Christine Lagarde’s choice of words in press conferences can move EUR/USD 100 pips, but only if you understand the context. Is she signaling concern about inflation persistence, or is she more worried about growth? Track the language patterns over time. When central bankers start using different terminology, markets eventually follow.
Economic Calendar: Your Weekly Bible
Sure, everyone knows NFP day moves USD pairs, but do you know which releases actually matter for specific currencies? Australian CPI might be critical for AUD/USD, but it barely registers on EUR/GBP. Start categorizing economic releases by their historical market impact for each pair you trade.
Here’s the advanced play: track how markets react differently to the same type of data depending on the broader economic context. A strong employment report hits different when inflation is running hot versus when deflation fears dominate. GDP growth matters more in recession fears than during expansion cycles. Context is everything, and building that context requires months of observation and note-taking.
Building Your Trading Edge Through Systematic Review
Every Sunday, pull out a notebook – yes, an actual notebook – and write down your market thesis for each major pair. Not some wishy-washy “could go up or down” nonsense, but specific levels, catalysts, and timeframes. EUR/USD breaks 1.0750, next target is 1.0650. GBP/USD fails at 1.2800, look for retest of 1.2650 support.
Then, every Friday, grade yourself. Were you right? Wrong? More importantly, why? Did you miss a fundamental shift, or was your technical analysis off? This isn’t about being perfect – it’s about getting better at reading the market’s language. The best traders keep detailed journals not because they love paperwork, but because pattern recognition only develops through systematic review.
Stop looking for shortcuts. Start building expertise. The market will test you every single day, and when it does, you better have more than hope and a moving average crossover in your arsenal.
Yup! Anything with consequence at hand a guy or girl should constantly sharpen their skills in. From about 3 yr old til 18 I was very serious in downhill ski racing. Up at 5 to run and stretch for 45…off to school for half day…run race courses for the afternoon…eat rest…lift weights and work out in the evening…do my school work and go the eff to sleep. Rinse repeat 6 days a week. Was a lot of work but produced great results and the lessons learned from those years have helped me at every stage of my life. Practice practice and only do it if you love it. Otherwise it just feels like a bunch of work and kind of a pain in the ass haha.
Great post Kong – its not always about the actual trade at a particular time. Anyone can catch a wave, but surviving in the open sea is another matter.
I heard a great line on this theme from a completely different arena, which is about experience:
After 1,000 hours practice and study, you qualify as a novice (i.e. 8 hours per day 5 days per week for six months)
After 2,000 hours you qualify as an apprenctice (8 hours per day for a year)
After 5,000 hours you qualify as a tradesman (2.5 years)
After 10,000 hours you might qualify as expert (5 years)
After 20,000 hours a Master (10 years).
This is only if you’re still in the game. So at these rates its a full time job and needs to be treated as such, and anything less is being unprofessional and risky.
Me, I’m just a tradesman still learning this trade.
Hi Kong,
Very good post. Quite appropriate for me now: left my job last week, to go full-time trading. Have about 7500 hours / 12 years behind me as experience, with OK results (but nothing like yours). Kind of curious what results can be achieved when going full-time. So I am very interested in your approach – like your Sunday preparation/routine. I am looking forward in following your posts (have been for a while), and plan to comment more.
Do you know the work of Van Tharp?
Profitminer! Love the handle.
Hey listen…..going full time was the aboslute #1 best thing I ever did ( as insane as it was at the time ) in that…..the timing for me “life wise” could have been better BUT – the minute to minute focus ( as tedious as it can be ) crams a lifetime of learning into one short year.
I can only reccomend that you keep your postions small to start, and hope that you’ve “got a little something tucked away” for a rainy day as…….you’ll run into a couple of those. All said – my first year full time was a touch better than break even so…it’s an investment.
I can’t stress it enough….getting in touch with a given asset in a minute to minute sense is invaluable as each has it’s own unique characteristics ( you already know this ) and as much as a pain in the ass as it can be at times ( the number of hours logged staring at the screen ) I’ve always kept it in the back of my mind that – this is a skill you can take with you forever so…….why not get it figured out!
I know of Van Tharp…..never read but….understand that it’s a little “dated”. Likely great info none the less as you can never stop learning.
Thanks Kong for those words!
I guess I am in the same boat as what your were, what with two teenage children – but yes, we have got some tucked away for a rainy day.
With regards to position sizing – yes, know about that quite well, as most accounts are blown up by disregarding risk (most confuse position size with risk BTW, they are two different things). I would urge you to read Van, as he has some great ideas about risk / money management, and his psychology teachings is spot-on I would say, not dated.
Regards