Here we are going to look at the most famous trading experiment of all time where a group of people with no experience were taught to trade in just two weeks and went on to make multi million dollar gains.
The experiment we are looking at here, is one conducted by Richard Dennis one of the true trading greats. Dennis wanted to prove that anyone could learn to trade, regardless of age, sex or educational background.
He taught a group of people with no trading experience, who ranged from a security guard, to an actor, to a lady auditor, to name just some of the group and taught them to trade in just two weeks. The rest of course is history, as the entire group went on to enjoy Forex trading success and make fortunes.
So what can you learn from them?
There are three facts about the experiment which any trader should make part of their essential Forex trading education and here they are:
1. Simple Systems Work Best
The system was a trend following breakout system which traded long term and was so simple anyone could learn it and it’s a fact that simple systems work best as they are very robust in the brutal world of Forex trading.
Complex systems have a tendency to lose, as they have too many elements to break, so you need to keep your system simple too. Their methodology of a long term breakout strategy was an excellent way to trade and still is today.
2. Money Management is the Key
If you want to win at Forex trading, you need to do it just like the great football teams and that means you need to have a tight defence. A top football team will know, if it keeps the score down (restricts losses) its offence will get opportunities to win the game and it won’t need many. Most traders think money management is not as important as the trading system itself but it is! If you lose too much, you get wiped out and the game is over.
3. Maintaining Discipline
If you read interviews with the group Dennis taught, most of them indicate that the trading system was easy to learn, the hard part was taking losses and maintaining discipline until profits were hit again.
Like most trading systems, this one had far more losses than profits and it’s hard to trade with discipline, as the market takes money from you and makes you look a fool. Discipline is based on confidence and a good education and Dennis made sure, his pupils knew why they would ultimately win and gave them the mindset to succeed.
If you understand the above, you will see that anyone can learn to trade and you only need a simple system but the biggest barrier to trading success is getting a disciplined mindset you need to get the right mindset and this comes from education, confidence and knowing your strengths and weaknesses.
You can enjoy currency trading anyone can, so read more inspiring stories like the one above and get on the road to currency trading success.