In order to become a successful speculator you must learn the art of speculation. This begins with discipline. It starts with the basics. Basics are boring but essential. If you do not master the basics you will not master the art of speculation.

Just like any other artist spends endless hours practicing and perfecting the basics you must do likewise. Before we go into some of the basics let me re-iterate the one essential ingredient – Discipline all others are secondary.

Let us begin with the basics. Treat Forex Trading and Currency Speculation as a business. That means you need a dedicated space to practice your art un-interrupted. Every day you need a place to go and work on being a successful speculator. Set regular hours of work for each day and keep them consistent. If you choose 8 – 12 or 7 -3, it’s not as important as it is sticking with the schedule. Five days per week whether you feel like it or not, go to your work area and stick with the schedule.

Avoid distractions. Pretend that you are working for someone else and at the end of the day you will have to report to him. This means that during your schedule you don’t decide to go shopping, do groceries, and mow the lawn or hundreds of other things that come up during the day. All non-business related phone calls are to be avoided including surfing the Internet and chatting.

You are working! You are becoming a successful speculator not a professional jack of all trades.

Yes, I realize that I spent a lot of time on one point. However if you can not commit to this one point than stop reading now and save yourself the time required to finish the remainder of the book. Do something productive with your time like gardening. Half hearted efforts will not make you a successful speculator any more than driving a car turns you into a competent mechanic.

By this point you should be able to answer the question: Do I have the desire to dedicate a portion of my time to the discipline of learning the art of successful speculation? Remember all you need is a minimum of 2 hours per day to get started, of course the more hours you dedicate the quicker progress you will make, but 2 hours per day is enough to get started.

You took the first step by purchasing this book. So get your money’s worth from it, let’s continue.

When you really think about, currency speculation is like no other job. You have a pleasant working environment, get to choose your own work hours and are surrounded by constant excitement. It’s not much of a sacrifice is it? And the potential rewards, let’s not lose sight of the rewards. Yes, money isn’t everything but it sure is a nice thing to have.

Another reason why it is important to emphasize the basics is daunting statistics. It is generally accepted that only 5% to 10% of all speculators make money, this statistic has held over several decades and there is no reason to believe that it will suddenly improve. Out of 100 people who are reading this book if they do not follow it 90 to 95 of them will lose some or all of their capital. That should be enough to motivate you—be disciplined and learn the basics.

Recently, I had an opportunity to watch and listen as my son learned to play guitar. He would spend hours learning the chords and notes, playing the same song, or parts of a song to be more accurate, over and over again. Barely recognizable, but this did not deter him. Then one day as I was reading I heard music, yes a song that I recognized played almost flawlessly as far as I was concerned. My son became an artist. He learned the art of playing music on the guitar.

Speculating is much like that, fortunately for us it’s easier to learn but still requires daily discipline. Artists aren’t born they are made, same with speculators. You aren’t born a speculator you have to become a speculator.

Another point that needs to be addressed is that speculation is a lot like gambling. In fact it could very easily turn into gambling which would explain why so many lose. In order to be a successful speculator you cannot afford yourself the luxury to depend on luck. You need to know all potential outcomes before you place and order and stick with it. If you don’t you will fall into gambling and in the long run lose your capital.

Not only have we seen this over and over again we have done it to ourselves. The strange thing about it, you don’t realize or admit to what you’re doing. It’s obvious to others and obvious to you when others are doing it but oblivious to you.

Then a strange phenomena occurs. You develop a form of selective amnesia. You can remember everything except how much money you lost. I haven’t heard a speculator yet admit to losing money. Miraculously they always manage to be even. This is quite startling when you consider the statistics. Either decades of data are wrong or our speculators turned gamblers are lying.

You probably have guessed the answer-most speculators are liars. They quickly recall all their profits while totally ignoring or acknowledging the overwhelming losses. Talking about not being able to see the forest from the trees. At all costs avoid this trap. "Don’t be a lying speculator, especially to yourself". If you’re losing money it’s better to tell someone it’s not any of their business that it is to tell them you are even. They will know you’re lying and you now know that you’re lying.

Ivan Cavric

Excerpt Taken From

Forex Frontiers