DailyFX Tips & Picks: The difference between trading and analysis – a boot camp for novice traders

TRADERS’ best ideas often turn out to be their worst. It’s almost ironic. Great ideas turn into bad trades, and bad trades turn into lost money. It only takes one of these bad trades to wipe out the profit from hundreds of better ones. Even worse, that one bad trade can snuff out any gains that have been made, and begin to drain a trader’s precious capital. Eventually nothing is left – just the trader, with their empty account and a “good” idea.

It’s the trader’s job to forecast the future, using analysis through a variety of mechanisms in an attempt to make money. Fundamental analysis is extremely popular, as investors analyse the inner workings of an economy to try and get an idea of what they might be able to expect in the future. Technical analysis looks at the past, all in an attempt to see what may happen. While far from perfect, these are the primary tools traders and investors use in their search for profitability.

There’s just one problem. Human beings can’t tell the future. Whether it’s a football match, a bar bet or a currency market, the future is uncertain, and that’s what makes life fun. It makes all of these pursuits exciting. But it doesn’t help a trader in the pursuit of profitability.

This is the difference between trading and analysis. Analysis, whether fundamental or technical, can help traders get the probabilities on their side, if even just a little bit. But the fact of the matter is that those probabilities will never forecast the future with 100 per cent accuracy. And as long as that’s true, all of the fantastic analysis in the world won’t allow you to find consistent profitability in financial markets.

On Friday 30 May, we’re coming to London to help traders understand this dichotomy between analysis and trading. FXCM is sponsoring an all-day Spread Betting Boot Camp to teach traders analysis, while also showing them how to use it. There’s no cost to attend, and registration for the event opens at 8.45am on Friday 30 May.

The editor of City A.M., Allister Heath, will open the event at 9am with a presentation titled Today’s UK and Global Economies. This is fundamental analysis at its finest, and I’m excited to attend another of Heath’s compelling presentations. FXCM currency analyst Christopher Vecchio will continue that theme as he teaches you how to turn headlines into trades. FXCM market analyst Alejandro Zambrano will then shift gears from analysis to trading, with a discussion of trading psychology.

In the last event of the day, we’ll take what you’ve learned and I’ll show you how to put it to use in the forex markets. We won’t waste time trying to teach you how to tell the future, nor will we show you how to find the holy grail of markets.

But we will teach you to trade.

For more information and to sign up for the event, visit: fxcm.com/uk/resources/education/london-bootcamp/