I spend most of my time trading and teaching others how to trade by way of my computer. But, I have conducted a multi-day Forex trading conference. My responsibility was to give a one-hour lecture and then lead three, three-hour live trading sessions.

While conducting the live trading sessions, I realized two important things that every stock, futures and Forex trader needs to be aware of.

Rule Number 1: Have Discipline and Patience

I always assume people hear too much on this topic, so I don't mention it much, but, wow, was I wrong! During the live trading sessions, I would first teach the students how to quantify demand (support) and supply (resistance) on the charts.

I would then walk them through a detailed yet simple lesson and set of rules, and, then, we would actually set up trading opportunities live and enter the trade when price would reach our pre-determined demand and supply levels. One of the trading opportunities I set up showed a chart of the Canadian dollar.

Keep in mind that what I am writing about has nothing to do with Forex specifically. We could have been looking at a set-up for a stock or any market you can trade for that matter.

As you might well expect, the set-up for the Canadian dollar in this particular class had a quality demand level and a decent supply level, and price had dropped right into the demand level for a low-risk / high-reward buying opportunity. Also, based on the "odds enhancers" we had just gone over in the training session, this was a very high-probability trading opportunity.

What was so shocking to me is that, when it came time to enter the trade, hardly anyone actually bought, and half the group was trading a demo account. They started asking whether I thought the level would hold and if we should wait for some confirmation of a rally, oversold oscillators or perhaps moving averages to turn higher.

To make a long story short, very few traders in the group bought even though the entire trade was handed to them, the risk was very small and the reward was very ideal. After prices turned higher, some of the people began to buy. As price moved even higher, more and more in the group felt comfortable buying even though, as price moved higher, risk was increasing dramatically.

The students’ fear of a small loss was greater than their desire for a low-risk entry. What became apparent was that discipline was the issue.

Rule Number 2: Follow the Rules

The second lesson learned for me came up during the part of the lecture when I was going over the rules. I clearly suggested that people pay close attention to the specific rules, of which there were only four. While some wrote them down, others wrote parts of the rules. Then, later, the same people asked, "What were those rules you talked about before?"

It was as if it were hard work to write four simple rules. I am not complaining at all; these were very nice, smart people. My lessons learned from conducting this class were not about that group but about people in general.

While conducting this class, I realized that you can hand people golden nuggets, but they just might see the gold as a rock with some color on it. No matter how much you show and tell, I realized that it all comes down to what is within us.

All of us have to take responsibility for our beliefs and actions (or failure to act). It was an amazing experience for me, but I guess that's what makes a market.

*Reprinted (and modified) with permission from Online Trading Academy (www.onlinetradingacademy.com). Sam Seiden can be reached at sseiden@tradingacademy.com.

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