My own answer is “you bet I am!”. But I’m working on it. Peter Steidlmayer is categorical: “You can’t be a jealous person. A jealous person has a very hard time succeeding. He’s always reacting and not thinking. In other words, making emotional decisions. A good trader is not affected when someone’s doing better than he is.” Steidlmayer sees generosity towards your fellow man as the first requisite of a great trader. What does he mean?

It goes back to his analysis of what determines results in trading, namely: your market understanding; your trading strategy; and you. “You” is something you have to know, says PS. “You have to be you” and you have to work within your capacity. That means sticking to the position size, time-frames and method with which you are comfortable. And doing these things obviously has nothing to do with anyone else, so comparisons are unhelpful and could be seriously damaging. Indeed, wise traders sometimes say there is no such thing as a good method or a bad method; there are only methods that suit you and methods that don’t suit you. Which leads on to other things like independence and taking responsibility for the trade, which are

hallmarks of the successful trader –and of the Adult in us. And of the winner: it’s the loser, remember, who says “If only…”. Perhaps that’s also part of what Steidlmayer meant.

Currency Bulletin’s method for analysing the currency markets rests on age– old principles. It assumes that the big money is made in the big swings: but you cannot make big money out of the big swings unless you are confident about the direction of the swing. Big swings are regularly interrupted by counter-trend corrections, which challenge our confidence. Since we do not know in advance whether a counter-trend movement is a correction or a complete reversal, it follows that we can only trade the main trend with confidence if we have a method for locating and monitoring all major counter-trend movements. The one thing that all changes in price trend have in common is a change in sentiment among participants. CB’s method provides a systematic way of determining the main trend, its corrections, and its reversal.

The method is only one third of the winning formula: the rest is you. The method works. If you follow it, you will usually hit the target. You will sometimes miss. That’s OK. All you have to do to win over time is to shoot.

Don’t worry about hitting or missing. When you know it’s the right thing to do, whatever the crowd is saying, just shoot. That’s the winning formula.

NOTE: Terms elaborated in the glossary are in bold type. So if you see bold type in the text you are invited to look up the entry in its alphabetic

sequence. The numerals after each entry refer to the page number where the subject is first mentioned – or where it is dealt with in depth. A short-list of highly recommended books will be found on the last page.

Arbitrage 39,93 . To arbitrage is to undertake a trade with little or no risk, by simultaneously buying and selling different forms of the same risk: for example buying a forward currency and selling a future at similar maturity (see EFP )– or borrowing a currency and selling it forward at the same time. Used as a noun, this is an arbitrage.

At-the-money 96 . The right to buy or sell and option is available at a specific price, some-times called the strike price. When the strike price is close to the going market price, it is “at-the-market”. When it’s on the profit side, it’s “in-the-market”; when it’s on the loss side, it’s “out-of-the-market”. See also Strike price.

Bear (ish). a would-be seller – opposite of bull (ish).

Berne, eric 111 . Eminent psychiatrist of the psychoanalysis school of Freud and Adler; founder of the school of Transactional Analysis ; and author of several influential books including Transactional Analysis in Psychotherapy (Souvenir Press, ISBN 0 285 64776 8), and best-sellers Games People Play (Penguin, ISBN 0 1400 2768 8) and What Do You Say After You Say Hello (see book list).

Big Hitters, The 68 . By Kevin Koy. Intermarket Publishing, Chicago 1986. Interviews with market traders (see book list).

Break-out 62. when a price has been moving more or less sideways in a consolidation range, it is said to break out, or to make a break-out when it moves out of the range either up or down. Such a move is defined by hindsight: if the move out of the range is not followed by a decisive continuation in the direction of the breakout, it is called a “false break-out”.

Bretton Woods 7 . the location of the meeting in 1944 between Britain, USA and Canada at which the IMF

(International Monetary Fund) and the World Bank were established. The original purpose of the IMF was to set up a system of monetary and currency stability in the post-ward period, involving exchange rates fixed to the US dollar, which was in turn fixed in relation to gold (at $35 per ounce). Hence “the Bretton Woods system” came to mean that fixed exchange regime, in which rates would only be changed in the event of “fundamental disequilibrium”.

Broker 17,93 . Most banks deal in the cash and forward foreign exchange markets on behalf of customers as well as for themselves. Dealing through banks can be economical if you use at least three banks and deal in size (over Ј5m or $10m), particularly in spot markets. You can also deal in the cash and forward markets (also called the “ interbank market”) through a broker – though there are not many left who still transact this business. Most

American futures brokers will handle the currency futures, and the big ones such as Merrill Lynch, Shearson Lehman, Prudential Securities have offices in the big European financial centres. You may have to pay $100 per ‘round trip’ (in and out). There are also smaller brokers who can be cheap, friendly and efficient. Not many are happy about accepting one-or-two-contract customers. Lind-Waldock (UK 020 7247 0471 or 0800 262 472 – toll-free), claims to be the world’s largest futures-only broker – offering the round-trip at $36 – and welcomes enquiries from anywhere in Europe or the rest of the world. Both these brokers offer a so-called execution-only service for these rates – meaning no advice. This is the kind of service you want, not opinions.

Bull (ish), bear ish48 . A bull thinks a currency or security or whatever will go up and holds it (long ) or would like to: he’s bullish. a bear is the opposite and is short or would like to be.

Cash 92 , Same as spot.

Chaos. the science of seemingly infinitely complex developments in “dynamical systems”, e.g. turbulence – and stock market crashes? Also the title of a marvellous book by James Gleick. (See also fractal ).

Chartist 5 9 . A pure chartist believes that the only data worth studying for the analysis of market prices is price. Some also look at volume and open interest and other market data, in which case they may be referred to as Technical analysis.

Clearing process 3 0 . The process whereby an order, which may be for billions of dollars, spreads through the market-dealing mechanism until buyers and sellers are finally matched.