| It's been my observation that within online | | | | financial markets including the foreign |
| communities interested in investment | | | | exchange market. But these models differ in |
| opportunities that there are, broadly | | | | one very important way from the kind of |
| speaking, two kinds of opinions that you get | | | | models created by trading gurus, it's a |
| when it comes to trading stocks or today's | | | | matter of pure assumption for economists that |
| poster child for big trading profits, foreign | | | | trading systems don't work! Economists don't |
| currency. The first come from the hopelessly | | | | day trade, and no, they don't swing trade |
| naive and usually high-energy dreamers who | | | | either. A high investment return to an |
| promote in near blind religious devotion some | | | | economist which can't be explained away by |
| particular trading system or website which | | | | risk is considered an anomaly. And if a |
| will generate huge sums of money with very | | | | trading system were ever proven beyond a |
| little effort in a matter of days or weeks. | | | | reasonable doubt to work, the author of that |
| This trumpeting is usually met quickly with a | | | | system in addition to becoming rich beyond |
| great deal of skepticism from the more mature | | | | anyone's wildest dreams should take a crack |
| crowd who point out the obvious, that no one | | | | at the Nobel Prize, since they'd have clearly |
| would sell such a money tree for a few | | | | upset the reigning paradigm of thirty years |
| hundred or even a few thousand dollars.If you | | | | or so in the field of economics.Economists |
| have a winning system, why go through all the | | | | reason that all the information that can be |
| effort and risk of taking on a new business | | | | used to predict stock prices or exchange |
| venture, namely, to market your system when | | | | rates is easily enough obtained by all |
| you could in fact, just continue to use the | | | | traders and therefore, the implication of all |
| system indefinitely to generate more money? | | | | financial information at any given instance |
| It's not like it takes all that much more | | | | is already reflected properly in those prices |
| effort to invest a few extra key strokes and | | | | and exchange rates. Emperical studies back up |
| add a digit here and there to the trades | | | | these beliefs about market efficiency very |
| you're already making.To become a successful | | | | well. But it's not my purpose in this |
| trader then, those with a bit more wisdom | | | | particular article to make the case of |
| argue, it will take time, practice, and | | | | economics. My purpose in this article is |
| study. Afterall, professional traders have | | | | merely to point out to the new traders that |
| not only many years of experience behind | | | | the typical path of education doesn't exist |
| them, but plenty of formal education in | | | | for trading as for other professions.If |
| finance and economics as well. And of course, | | | | you're interesting in making money by healing |
| they are the competition stay-at-home traders | | | | people, you'll go to medical school and |
| face. But interestingly enough, even this | | | | receive years of study and training teaching |
| more sober view doesn't quite sum up the kind | | | | you how to do precisely that. If you're a |
| of difficulties which lie on the path to | | | | day trader contemplating a formal study of |
| becoming a successful trader -- at least from | | | | economics or finance to enhance your trading |
| the perspective of an economist.Trading | | | | profitability, your coursework will consist |
| systems concocted by self-styled FOREX gurus | | | | in part of debunking the industry you seek to |
| are nothing more than a kind of economic | | | | work in. And if economists are even mostly |
| model. A way of forecasting prices or | | | | right, the overwhelming likelihood is that |
| exchange rates based on historic trends and | | | | it's a really, really bad idea for anyone to |
| other macro-economic data. Economists also | | | | quit their job and set up shop in their |
| create models to describe the phenomena of | | | | basement as a foreign currency trader. |