Jim Kelvin was a retired cattle rancher from Texas. He had developed an interest in the futures market during the years when he would hedge his livestock at opportune prices. After he sold his ranching business, he began to experiment with a few small trades as a hobby.
Jim read everything he could find on futures trading. He studied all the technical models, read manual after manual on market analysis, attended seminars, and kept point and figure charts. In time, he felt he had a firm grasp on all the factors that make the market tick and began to look at trading as a serious vocation. He wasn't making money, but he thought he was just paying his dues as he learned the intricacies of his trading system.
One morning, Jim got up at 6:00, as he always did, and went to his study to turn on his quote monitors and prepare for the market's open. He picked up the Wall Street Journal to see what the bank traders and brokerage analysts were saying about the foreign exchange market. He had been watching the Japanese yen closely, because he felt the recent depth of coverage in the news would surely reveal some good trade opportunities. The U.S. dollar was expected to record new lows because of a slowing U.S. economy and consistently negative trade balances, forcing the yen and other currencies higher. All the foreign exchange related articles on his quote equipment news service were bullish for the yen.
A good friend and fellow trader called and commented on how the ...