I find it extremely difficult to trade long term. On television, I am always asked to make predictions and like a good talking head I try to present the most logical, likely scenario, but in reality its very difficult to get the timing right on long-term trades. For example at the end of last year when I was guest hosting the final trading day of the year, I was convinced that the Chinese slowdown was imminent and that AUD/CAD was a great short for 2012. It turned out to be one, but not before rising 400 points against me before the theme started to play out in the market.

The fact is that just like with weather, it is a lot easier to predict price action in the next five minutes than it is to predict it in the next five days (although please note that that analogy is very flawed as it is MUCH easier to predict short-term weather patterns than it is to predict short-term price patterns). In either case, for good or bad, I like to stay on the short-term time frame, trading intra-day price flow.

When you trade short term, you have to be prepared for a lot of unexpected movements. You may be sitting pretty in a profitable position close to your target level when some mid-level functionary from some tiny East European country make some incendiary comments and the trade blows up in your face. This is very much the nature of short-term trading and is ironically enough why you need a long-term view.

Intraday trading is fraught with what I call "unscheduled" risk, but if you are trading a strategy with an edge, the law of large numbers should overcome these obstacles and make you profitable in the end. Just like a good poker player, you should simply shrug off these stop outs as "bad beats." The more zen you are about such bumps on the road of trading, the more successful you'll be. The one thing you cannot absolutely, positively do under any circumstances is fight the market and add to your losing position altering the risk reward parameters of your strategy. What should be a small controllable risk, suddenly becomes a runaway loss. Review any trading blowup in history with the London Whale being only the latest such disaster and the dynamic is always the same. Some trader always thinks he is smarter than the market and as a result is inevitably carried out on a stretcher in the end. This is especially important to remember for us intra-day traders who operate on razor thin profit margins. Any deviation from plan will cost dearly. Want to trade short term? Then have a long term view.

Boris Schlossberg serves as director of currency research at GFT, and runs bktraderfx.com.