Forex

I started playing with one of the foreign exchange / commodities trading programs the other day. I started well, then lost some cash, and now am being a bit more careful and gradually making some back. I'm using the system from www.avafx.com which seems good but I haven't compared it with anything else.

The most important lesson learned so far is that I was initially motivated by greed and fear. When you see gold shooting up, the instinctive reaction is "I want some of that!". In my experience, the greed + fear of letting an opportunity go by outweighed the fear of losing money on the trade. This is of course a fantastic way to get sucked into placing bigger and bigger bets trying to make back any losses, so watch out.

Don't believe people who tell you what to buy, or say that gold will continue it's rise forever. One of the reasons that gold went so high is that the US dollar was weak. Gold is priced at USD/ounce, so weak dollar means expensive gold. Now the dollar is firming up a bit, I wouldn't expect to see such high gold prices for a while. But then I'm not an expert.

NewScientist had a piece a while ago about monkeys who were given presents. They either got 1 coin with a 0.5 probability of getting another coin, or were given 2 coins with a .5 probability that one would be taken away. So the result is identical, statistically speaking. But the monkeys preferred the first option.