The question reveals whether or not you have an edge
The best thing you can read right now is a report from Bluemountain Investment Research titled: Who is on the other side?
They sumarize it like this:
If you buy or sell a security and expect an excess return, you should have a good answer to the question “Who is on the other side?” In effect, you are specifying the source of your advantage, or edge. We categorize inefficiencies in four areas: behavioral, analytical, informational, and technical (BAIT).
Put more simply, that would mean an advantage via: 1) less emotion and more objectivity 2) better research and preparation 3)
having information others don’t have 4) taking
advantage of forced transactions.
Generally, retail traders are at the mercy of larger operations but that shouldn’t be a surprise to anyone given the stats on retail success.
I’m not going to try to summarize any more than that because it’s a 30-page report with 140 references. Scott Barlow from the Globe & Mail said it was “the best research report ever written for investors.” It’s geared toward stock markets but almost all of it equally applies to FX. One difference is that FX is more flow driven while virtually all stock buying/selling is via analysis.
It also comes with a handy checklist and (as the video below shows), checklists are one of my favorite things.