Today's comment is by Jack Crooks, our Currency Director and editor of Crooks on Currencies and The Money Trader.

Dear A-Letter Reader,

At our holiday lunch yesterday, Erika Nolan, my publisher, asked me if there was a particular secret to success in the currency market. My short answer was of course no.

But the more I reflect on the question, the more I realize there are some key ingredients that are essential for success when you play the currency markets. So here's a look at the essentials and how I structure my trades each day in to assure long-term success. 

Perspective, or the ability to rank things in relative importance, is the first must-have for trading in the currency markets.

You can only gain perspective by doing it... or through your life experience. I may have a particular advantage here. I've been married for 25 years and raised four kids and several dogs (which are treated like kids in our family - my kids would argue the dogs are treated better than the kids. I retort, there's a reason - the dogs always listen and never give me any trouble.)

If you have kids, you know what I mean by perspective. One of my favorite bumper stickers reads this way: "I have kids, I can handle anything." Bingo!  When you're trading in a market that can viciously change directions in an instant, you have to be flexible and open to anything. Plus you need to be able to separate the important stuff from the noise.  

The second ingredient to trading success is humility.

You must understand (and accept) the fact that at any moment the market can prove you completely and utterly wrong. This is hard for a lot of people to swallow. Their egos stand in the way. Once again, rearing multiple kids has paid off in spades. With a house full of kids, your personal needs and self-importance sink to the bottom in importance and stay there for years. Any hubris-filled ambitions are put on hold. And once your kids are grown and you can finally act on your previous ambitions, you realize how shallow they really were anyway. 

The third key ingredient is love for the currency markets. You have to enjoy the nature of the work and learning everyday. 

This is critical because in order to maintain your edge in currencies, you have to do a lot of homework. And if you don't like what you're doing, you won't stay disciplined. 

Here's a look at the things I do each day to maintain my edge and increase my chances of long-term success trading currencies: 

My day starts around 3:30 a.m. EST.  I roll out of bed and fire up the coffee pot; then I get to work. Why so darn early? Well, it's because a lot has happened in the trading day for currencies by then. It allows me to get an early look at the price action in London, which often sets the tone and trend for the rest of the day.

The first thing I do is look at prices and intraday charts of all the major currencies to see the overnight action. I get a bearing on bond, oil, and gold prices too. 

I then scan the news headlines on the front page of The Wall Street Journal, Bloomberg.com, the Financial Times, and Dow Jones Newswire, looking for surprises and thinking about macro themes and ideas.

I read the Credit Markets section of The Wall Street Journal every morning because interest rates are the ultimate driver of all things financial and the Fed is still the world's defacto central bank.

I then read Caroline Baum's column at Bloomberg.com if I didn't the day before. Ms. Baum is without a doubt the best financial journalists there is when in comes to continuous commentary on interest rates and credit markets. She writes often, and almost always provides insight that goes beyond the consensus.

I scan Morgan Stanley's Global Economic Forum and read articles of interest. This is great stuff with lots of stats backing their views. It is a bit deep at times if you don't have a background in economics. But it's well worth the read. And it's good fodder for thinking of intermediate-term scenarios of capital flows across the globe. 

And just as important... if not more so... I read my email from friends and traders around the world. They often have real ground-level view which you will never find in the papers.

The ideas for Currency Currents flow from these readings and news scanning and appear on my Sovereign Society blog each day.  

Then the attention turns to the key reports due out in the United States. I have an idea of what I'm expecting to see for the major releases. Examples of some of the major economic reports in the U.S. include: Federal Reserve Rate decisions, U.S. payroll report, consumer price index, durable goods report, etc. 

My objective in doing this homework everyday is to help me make consistently profitable trading and investment recommendations. All that you need is a little perspective, humility and love of markets, and time to do your homework. If you have the first three, but are lacking the time for homework, that's why I'm here. Now that the kids are on their own, I have plenty of time for that. 

JACK CROOKS, Currency Director

EDITOR'S NOTE: All of Jack's strategies listed above also help him choose the best performing currency exchange traded funds (ETFs) for his latest currency trading service, Crooks on Currencies. Learn more about this service.