Who is The successful trader ?

Trader - basic employee trading industry. And while there are numerous community analysts and other professionals, versed in the intricacies of trade, the trader - the only driving force for exchange. It commits the transaction, and it depends on the financial result and the well-being of many, the real and imaginary assistants.

Winners are not judged
Financial companies and investors who decided to try their luck on the stock exchange, try to get the best trader. And to find out who the best, you need to evaluate its work. Yes and the trader is always seeking to compare their results with colleagues. And here there are many pitfalls, since the objective assessments of the trader's virtually none.

The main criterion - than past results. But in the modern history of Russia are very few traders with experience in at least ten years, and the fantastic results obtained during the years of rapid growth, yet have no say. Evaluate every yesterday a deal? However, many computations are often simply unable to most investors. However, there is an easy and reliable way to assess the possibility of the trader. To do this, there is no need to carry out complex calculations and analysis of reports on past transactions. But before we talk about it, consider the advantages and disadvantages of existing methods.

The first and main criterion for assessing a trader - from profit or loss. Traders who lose money, nobody is interested. And the winners are trying to compare. The interest arises for artists who have received 100-200% per annum. The modest results newcomers are only sympathy. And few people care about, not just a stroke compared the results of the trader who received 200%, and his colleagues, has reached only a modest 30-40% per annum. For this purpose it is necessary to understand how each of them came to these results.

«Technicians» and «fundamentalists»
For what reason do the trader to make money on the analyzed time interval - a month, six months, year? The only reason - the market has allowed him to do so.

Traders are often divided into two main groups: «technicians» and «fundamentalists». The first work to use technical analysis, occasionally listening to the news and quickly went looking economic data. They traded a few routine papers. Second, «fundamentalists», carefully studying the economy as a whole and all available information on individual companies and to further shape the portfolio of financial instruments. «Technicians» Market allowed to profit because the current state of the market in most developed meets their trading system. Changed the market - and the need to rebuild the trade rules, and not the fact that the new system easily adapts to changing conditions. This wizard has a few ready-established systems, and for him to predict the future behavior of the market. However, predictions on the stock exchange - the case ungrateful, so that the whole problem is not removed. «Fundamentalists» made a prediction, it is absolutely correct build a diversified portfolio. If the prediction came true, the projected growth or decline brings the money. Here are the fundamental data are late, it is known fact, so entry and exit from the market will be too late. Will take only part of the exchange of traffic. Such operations are more similar to investment, rather than on trade. And engaged they are not traders, and administering the huge funds.

But traders are traded in different markets and different tools. On the income always need to add the risk arising from the transactions. How to compare the speculator Debt and player on the FOREX? The ratio of income to the «Maximum Drawdown» - not the most objective criterion. In addition, many tools you can use the shoulder when entering into transactions. Connecting the new variables, only complicates the evaluation and does not add clarity. No, to compare the results of traders is very difficult. Therefore, the question the investor, what profit may be obtained, the trader responsible: «Look at my past results, I think, in the future they will not deteriorate». And it would have to add: «If the market does not change, which is very doubtful».

«We believe strongly in the heroes of sport»
Not every trader managed to submit reports on the real the deal. If the trader has a trading history, then once at the beginning of the career he or risk their own money and received a positive result, or was able to convince the imminent success of a very high-risk investor.

Long trading history can boast not one. What do beginners? For beginners coined the competition. Speculator to become a stock exchange athlete. The company which hosts the competition, has a clear goal - to attract new customers. Typically, the promised prize of comparable value to the company's advertising budget, and no trick is not here.

For the novice trader - an opportunity to loudly declare themselves in the event of a victory. Typically, the company publishes the top ten or twenty best. So it is all win.

In the loser might be an investor, trust the results of the competition. It is not a fraud. At such a big fraud will never go - no advertising is not enough to restore your good name. The problem of old - as a way to assess that the trader was going to win. Contest lasts at most a few months, but this is a very small sample to evaluate the results.

It is important to understand what motives guided by traders. The basic approach - winning at any cost. Even if the transaction carried out on real accounts, the main thing - the maximum yield. On the risks, no one remembers, the evaluation result as a percentage of annual - that it should impress potential investors. And the prize often quite large, so that transactions are committed on a «win or die».

How can achieve fantastic results in the competitions? Usually it is a good sign in a strong trend with maximum leverage. If lucky, a little in the percentage of movement in the market led to significant profitability. They say that a trader was able to outflank the market, it's a true professional. Sometimes it's successful use of the trading system, and sometimes - just a good deal of input. Upon receipt of final results, it is difficult to see who was going which way to the top: at the hands of only the values obtained yield.

Most competitions are held continuously, with monthly evaluations. New user can always connect to the competition and just as easily get out of it. It includes the characters of this month. Noticed that the winners are often the traders who have been open position, which accounts for a loss, but the beginning of next month, coinciding with a strong otkatnym movement, which lasted a month. Trader accidentally hit the «absolute trend», while the account may remain less than half of the initial deposit. In any case, his name will appear in the list pobediteey it - stock champion.

There are many nuances in assessing the results of the market competition. Obviously one thing: trust the only indicators of the championship is not worth it. As a rule, the result of competition - an accident.

Index - the entire head
Much more objective - a comparison of the results of the trader to popular indexes. The task of the trader is to «reviews» index, ie get a return greater than with passive investing. In the United States published a list of funds, obtaining results that exceed the index S & P 500. Fund Manager-winners have become almost a national hero. Business magazines feel honored to get their interviews and put the photo on the cover. Investigate how objective information gives victory over the index. Indeed, the fund manager is difficult to reviews index requires great skill. The reason is that funds are tightly regulated. The portfolio is diversified and structured like indices. Defeating the index is possible if «skip kickbacks» when driving the market or use of hedging scheme literate.

Published results can be fully believed. But there are nuances. Results summarizes the results of the calendar year and the market does not recognize the calendar. Perhaps, another interval (eg, from 1 April to 31 March) may give quite different results - the trader will not be able to «deal» with the index. Therefore, it is necessary to take the stats for many years. To the ability of novice floor impossible - he has still no list of victories. And if the trader trades with leverage, and in general does not restricted in their transactions, the multi-year results say little about his true skill. However, victory over the code - it does the most objective criterion. Here are just a method to change the comparison results of the trader and growth (drop) the index.

The structure of the movement of prices
The maximum objective assessment of the trader can be obtained by continuous assessment of current results. It is not a weekly or daily stock - this is nonsense. It should assess the results of a trader on the «complete movement of the market».

It is important to determine the structure of the movement of prices. Substantial assistance in this may have fractals. Any movement of prices in the markets comes in two areas: the movement of trends and reversals. The Movement for the trend is called «momentum», and let the rolls remain «setback». Every trader wants to momentum was strong as possible, and rolls - small. The difference between the increase in price momentum and its fall-back if we can name «lever». Obviously, the higher the leverage, the greater the trader's current profit. With zero lever prices returned to previous levels, but with a negative - the trader receives a loss. The proposed reasoning is true for bovine, and Bear Market. The combination of momentum and recoil, giving the lever, and will be fractal (more on this see [1]). In fact, fractal - it «elementary particles» in the structure of prices. The period of the formation of fractal can be different, so the price break on the strict framework of the calendar can not. It is important to evaluate the leverage fractal - an objective change in the price level.

Let us look at Figure 1. It submitted a schedule S & P 500, divided into fractals. Impulses and the setbacks are, respectively, green and red, for the exact symbol used fractal figures. Color designation is provided by the author's own indicators, but for the same purpose you can use an indicator ZigZag - measure the percentage change of direction will change in the index. We believe that all of the fractals bychi, only fractal 1-2-3 - false bovine (no lever), such as fractal 5-6-7 - real bullish (positive leverage). Obviously, the increase in the index since early 2003 - the sum of all the levers of fractals. In the beginning of the year, the index S & P 500 was in an area marked 880, two consecutive false fractal (1-2-3 and 3-4-5) ensured the loss of about 100 items in the future market growth, and by the end of June, the index had reached 980 marks. The growth marked the true sequence of fractals. Suppose that the trader is limited to choosing the direction of transactions - is only allowed the purchase of shares, short selling is prohibited. In order to evaluate its work is to compare the results obtained during the formation of fractal and fractal value of the lever. If a trader is able to outflank the index in each or most of fractals, it owns the «secret knowledge to drain money from the Exchange».

The two false fractals trader to receive a smaller loss compared with the index, while the true fractals have to show profits higher than the true fractal lever. No matter how the trader will achieve this result. This may be a large number of short-term transactions, a trader is able to pick up the return on the momentum and «clip» kickbacks. In all cases where a trader overact fractals, it can replay the index as a whole. The only significant limitation is the lack of leverage in the transaction. Simple method to evaluate the work of the trader's objective and without a long trading history. In addition, there is no need to risk real money during the short experiment. It is enough for a few fractals make virtual transactions. The skill of the trader does not remain unresolved.

Objective evaluation of the trader
Perhaps the method of fractals - not the best way to evaluate the possibility of the trader. Apparently, there are other algorithms, but the purpose of the proposed method - to create a universal criterion for evaluating the results of trading on any Exchange or any stock exchange instruments.

In any case, the trader's assessment of the results should be limited to the following steps.

• Market price of any stock exchange instruments (equities, bonds, currencies) should define the structure, method of fractals - one of the easiest.
• When analyzing the results of neutralizing effect of the shoulder. Ideally, the trader must sell only the sum of the initial deposit. The lack of leverage will allow an objective assessment of the results, no matter what the specialist trader.
• the period must include at least five «elementary particles» motion graphics prices.

What are the advantages of the proposed approach gives?

• to evaluate how effectively the trader is using the opportunities offered by the market. In fact, it is estimated efficiency.
• Provides an objective assessment of whatever the stock market instruments. For example, the currency speculator who receives 200% return, it may be weaker than the trader, selling bonds to yield 10-12%.
• Refrain from calendar attachment avoids randomness in the assessment results. Figure 1 clearly shows that in 2003, the index initially fell 100 points, but six months went up by about the same 100 points. The picture could be the opposite.
• Assess the results with the use of fractals provides an opportunity to conduct ongoing monitoring of the trader.
• Even if a trader has shown negative results, it is possible to assess how he is opposed to the adverse movement in prices.

The proposed approach does not preclude the drawbacks. Certainly there are, but the main purpose of the article - to identify the problem: the lack of objective assessments of work in Russia is already a large group of stock traders. Lack of reliable and simple criteria deters investors and employers. Trader - undoubtedly needed in the future is very demanded profession.