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Zero sum game

There's an old saying, “To make a small fortune in commodities, start with a big one.”

You may be getting the impression that the odds are stacked against you; however, I don't feel that way at all. It's true that most people lose when trading commodities, but it's not because the odds are stacked against them. Every buyer of every losing trade could have been a seller and made money on that same trade, and every seller of every losing trade could have been a buyer and made money on that trade. A profitable minority is doing just that. It's not on every trade, mind you, but on balance. So what's the key? Is it how you analyze the market? We will discuss various analysis methods shortly, but the real determinant of success or failure is the trader's state of mind, the psychology. All winning traders understand this. Trading emotionally, or on gut feelings, will ring your death knell. You need to understand mass psychology because this is the reason markets move in trends. You also need to understand when the trends are turning and why the majority is wrong at turning points. The key to this whole equation is smart money management.


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