Morale among the trader

I was a professional trader for 23 years and quite confident that my experience in this business consistent with the experience of many, if not all professional traders. I have experienced and the successes and failures and the times of satisfaction and frustration. Like others, I had to develop and grow as the markets and market-based instruments have changed over time. Markets constantly forced me to re-affirm their values and reflect their own self-motivation, and even after all these years, I have been forced to confront the fears and doubts.

Fortunately, I am equipped with the knowledge of how powerful is the positive thinking and the ability to apply this tool in their daily practice.

When the markets closed, I share his time equally among the preparations for the next day, market research and work on his morale. Part of that involves reading a few paragraphs of motivational books every night, studying sports psychology, or impact on the physical aspects, such as exercise, diet and food that support my ability to focus and concentrate during the day.

Unfortunately, I can not say that was the point or moment when I felt as if I had reached perfection. However, most often than not, I feel as if I did not even come close to reaching that point. I accept the fact that this business was nothing but a continuous process, which will be launched once like many other efforts in life. For me, the term «trader» became a synonym for «lifestyle».

I realized that everything I do with my way of life to support the function of «trader», equally supports me very. Most of this is aimed at removing the stress, anxiety and peregoraniya. I have experienced them many times in his career, and each time it is reflected in the performance of my trade. My experience is not a hard life so different from that experienced by many people - death, divorce, and taxes. I zhongliruyu many balls at once. I sell, manage their businesses, responsible for ten employees and one children. I accept the responsibilities of the heads of the household, and I serve a great property. In addition, I have other interests and hobbies.

Stay in the game, defeated the stress

I would like to say that I am very rational people, but it is not. I pull rubber and delay things for later. However, I became a master of stress and anxiety and how to be with the mental side of trade. I imagine that if I can take care of this specific area, the results will be achieved automatically. It worked for me over the years and allowed me to stay in the game.

So, let me share a few things from my personal experiences, traditions and rituals, in order to manage some of the most important psychological aspects of trading. Sometimes, traders may feel alone in their experiences - especially when there are stupid mistakes and big losses, and over long periods of low activity. Believe me, I make every mistake described in the textbook, has suffered for many sleepless nights and talked with more experienced traders. Having gone through all this, I never wanted to leave this business. I do not like to sell, and I do not hate trade - this is just what I do. I love to work.

Some people are lucky, just find your game, and I am one of those people. I know the style of trading, with whom I feel comfortable. I never will be a long-term player, following the trend, and never will be one of those who are easily interpreted by fundamental factors, or long-term fundamental changes in the trend at the macro level. I never would feel comfortable selling to a strictly mechanical system. And I do not want to trade in ways that are totally dependent on my reflexes. Remember that a trader can not begin to improve their game, yet he is not precisely define, in what game he plays. At this stage of my career, I know their abilities, their strengths and weaknesses. I try to exploit their strengths rather than to become someone whom I never shall. This is something that you should try to develop in themselves. Know yourself.

Positive attitude

So, know your game is useful, but only knowledge of his game does not mean that I preuspeyu this. There are many things that needed to be done outside of market hours in order to succeed in the trade. I can go through the stages of preparation, organization and vnerynochnogo study. But I did not think that these are the things that guarantee success. Of great importance to me is the fact that I believe in what I preuspeyu. I will configure itself each day at the confidence that I preuspeyu, especially during periods when the inevitable doubts creep. A positive mental attitude is a form of religion for me.

Doubts kill success

If the trader has a positive attitude, it allows him to believe that focusing on the process, the results will be achieved by themselves. This involves an element of trust. Sometimes it's like to jump into the water from the tower - dive knowing that if we are to carry out a form, then we have to enter the water and show beautifully executed jump. Some people may be difficult to accept that if all of a sudden, my form is not completed accurately, you can get injured during the impact on the water. If doubts or negative thoughts invade my head when I «dive with the tower», I am doomed. I have so many tricks to eliminate negative self-attitude that positive thinking is just a habit.

Conversation with myself - this way, when we speak directly with one another, and sometimes negative thoughts are weakly perceptible. For example, if a trader says to himself, «I must succeed» or «I have to do a certain amount of dollars this month», then this type of thinking automatically creates tension and anxiety. Anxiety is an emotional decision-making at the time of trade. Emotions invariably lead to a losing transaction.

The first step - understanding

Removal of negative thoughts - it is a process. First, you must understand, when you think negatively, and to recognize that you can reorient their thinking pattern. Simple perefrazirovanie your mental model of «I must succeed» model «I can succeed» is a step in the right direction. The first sentence establishes the requirement for performance, while the second sentence underlines the confidence in your abilities. Second, suspend the negative thoughts, changing your physical state. Hlopnite's hands, push your fingers, or stand up from his chair. Third, reorienting their thinking on a running process to replace the excitement, the doubt or concern. «I can trust myself to make the right decision today», «I can use the emerging opportunities in their own interests, as they open during the trading day».

These processes seem to be quite simple, perhaps even intuitive, but they are likely not as intuitive as might be assumed. Positive thinking - this is something that requires training.

It is hard to overestimate how important was the positive thinking in my own trading career. This enabled me to overcome every setback, which happened in the market and convert it to get experience. I tell myself that all that neither happens, happens for some reason. Therefore, I must find a way to convert it, just as in sport. Look at tennis player who is losing the band during the competition and lost six games in succession. The situation looks rather bleak for the visitors. However, the player can make a breakthrough victory. And sometimes his opponent makes stupid mistakes. Top athletes have captured a small victory, and convert that momentum in their favor. This also happens on the sports team competitions such as football or volleyball, where one goal of providing a new impetus to the explosion, which has a playback command to victory.

The positive point of view

Trade, in this sense, is no different from sports. Convert negative experiences into positive and look for a way to learn from them. For every mistake that I make, I say to myself - well, that it happened now and I am thus able to learn it, but did not take place, when I traded a greater position in the future. I thank the market for drawing my attention to any of my weaknesses, so that I can learn and improve it. If market conditions have changed or ceased to market environment conducive to my game, I tell myself that I was given a great opportunity to do research and find new methods. All my best research occurred after the recession.

There is an excellent line of «hard work» and peregoraniem. I took the difficult path to set boundaries and define its limits. In the past I did not want to admit that I have any limits, and as a result had his immune system to danger. Better to recognize when it is time to stop a bit, rather than wait for the deterioration of health, or face big losses in trading.

Most traders know when they make mistakes. But when a trader peregorit, he was not able to respond adequately to correct the error. As if the inner voice said - «This loss is going to become so big that it will force you to relax from the market».

In addition to the physical signs that may indicate peregoranie, other signs include increased irritability and anxiety, forgetfulness and inability to concentrate. Traders who are more likely to be taking a big risk when peregorit. The delay, fatigue, a disregard for proper performance of pre-trade or inattentively relevant to the current position is often the next step. When someone peregorel, it is likely to increase the consumption of coffee, water or alcohol. Ultimately, peregoranie can lead to thoughts about «discarding towels» - leaving the business altogether or chronic depression.

Practice common sense

The main strategy to avoid peregoraniya is to lead a healthy and balanced lifestyle. This may include daily exercise, healthy food, hobby or outside activity, periodic vacations or even taking one day at the weekend to go to nature and enjoy the changing environment.

Educational strategies include visits Kurova or seminars, joining professional organizations, reading catalogs, or books on sports psychology and motivational subjects.

Sometimes changing the working environment - something simple, such as changes in the office - can make a novelty. Finally, it is very important is some kind of support system - a close friend, fellow-trader, or someone else who you can trust. Every time I have difficult periods, I have a sense of relief after the discussion, the trustee of my situation with a friend or friend-trader. In the end, we all have a similar experience in a particular case. Losses and errors are part of the game. Talk about them with other people helps us to move our normal human weakness due to the distance and allows us to move forward.

Three «R»

Let me introduce you to three «R», which I use to maintain their morale and the preservation of: Record Report (record), rituals (rituals), and a study (research).

Record Report is a starting point that leads the trader to the level where the trade is simply «hobby» to the next step «professional» status. At the end of each day, I record the statistics, like the range of market volume, value indicators and the ratio of supply / demand, to select some of them. I did it the first day, when I started trading. Once I updated graphics manually every night, because there was no graphics program, which we use now. During the past 15 years, I have to manually record closing price of 25 different markets, in addition to the values of the momentum and some other notes. If I did not record data at night market, I also do not sell the next day.

During the day, each transaction is recorded along with the number of orders, time and cost performance, along with the name of the broker, have fulfilled the order. This is to resolve any problems the next day and, ultimately, could save a lot of time, when in fact there is an error. I also write down your daily deposit available for trade, along with the current open positions.

With the use of electronic platforms, has never taken as obvious that the transaction will be properly reflected on the following day. The platform that I use, keeps an accurate record of all transactions that I make, so I did not actually write them, but instead to keep the registration file.

Compared with many other types of business, trade and markets may seem somewhat abstract arena. Actions such as the recording report helps me feel more productive and controlling your business. I do not teach statistics on the trade - Statistics on implementation of trade, such as the ratio of the winning and losing deals, the average gain and average loss. I believe that this will become a source of anxiety or stress for me. Instead, I have control over their assets of the curve and I do it monthly, not daily. Why? - Sometimes it's easy to perevozbuditsya, looking for profits after a large premium of the day. Big wins can have the same effect on the psychological state as well as heavy losses.

Traditions and rituals are an excellent tool to address the emotions, particularly the doubts, fear and anxiety. Although I personally do not have any special rituals that I could share with you, I believe that the maintenance of records is particularly useful for me. I will write a plan for the next trading day after the closing of each day. During the trading day, I will briefly record maximum and minimum fluctuations, as they are during the day. Many years ago, when I started trading in the exchange hall, I watched as many of the best traders diagram graphics «tic-tac-toe» or graphics fluctuations hand, during the trading day.

Physical and mental rituals - is key to building both confidence and consistency. I can not overemphasize the importance of this aspect in my own business. This is not only the ability to concentrate, but also the focus of our concentration. If you focus on the wrong things, it leads to a negative result. Most of what I do during the day - a simple observation. But I have very specific traditions and rituals of what things and how I see during the day.

At first, I concentrated on watching only a few ratios. Although I have built their capacity to handle large amount of information, I can still «boil brains» like any other. If I try to do too much or sell too many markets at once, I can get into a nasty situation. I have certain times of the day, when I draw attention to some relations. I have a limited range of market instruments, which I watch. I have three basic models, which I watch on the currency markets. In this regard, I am a reader of classical data waiting for their specific technical requirements or market conditions. This is my market tradition. You may have others that are more suited to you.

Outside the market raporyadka have privacy mode. For example, I try to get up every morning at the same time, take their nutritional supplements and have the same breakfast. This helps me «to enter the zone» or «to be on autopilot» before the opening of markets. These mental and physical traditions help me maintain my concentration and let me be distracted by other things. If the concentration is broken during the day, it's easy to become vulnerable. I always take action against external distraction and keep the philosophy that if something can be done at the end of the day, you will need to wait until then.

However, unexpected things will always happen during the day with all traders, regardless of how he may try to insulate themselves from the «noise». Once, a neighbor decided to move a little bit of huge trees in front of his house. Giant excavator royuschy for the pit, stretched all the telephone cables in the neighborhood, including our T1s. It took 24 hours to correct the damage. Such things always happen with every one of us whenever you have the most open position.

In addition, I believe that my record of data at the end of each day will be just another significant ritual to help me forget about any adverse events that occurred during the day, whether it is a violation of the telephone line, or what some problems in the family.

Third «R» - study

The study is an integral part of my business, and as for the trader, this should be an important part of your. The study - a process that never ends. I am absolutely confident that if I do my own research, I will always have an advantage over those who had not.

The study is important, even if the trader has a successful method of trading. Anyone who has been on the market for some time, witness the fact that market relationships are often altered. Thus, the study gives me confidence that there is merit in my approach to trade. I constantly improve their study in order to maintain this confidence at a high level. Study constantly reminds me that trade is a game of probability and the mean values, and shows all the ways in which the signal or the model may fail.

Please note that the study should never be done to confirm their prejudices. This type of research too often leads to conclusions based on a limited number of examples, and generally disrupted over time. I attach very little value to the study, conducted at less than 200, the number of examples.

Encourage yourself

Every day that I sell, I constantly remind myself of how far I have progressed. That would be so easy for me to evaluate my own work alone every day. Instead, I single out the area where I moved. Yes, «Old Dogs» should explore new tricks. I see how to improve my skills in the use of electronic trading platforms. For many years, I just dial a phone number, and to make reservations. The first two years, when we began using an electronic platform, I simply could not operate profitably with it. My brain could not take the extra steps required for placing orders. The only way that I could sell was that it had to be someone else in my office who could be executed, while I call warrants. I felt rather foolish inability to fulfill their own orders. I have tried many different trading platforms before you find one, which I feel comfortable. There was some learning involved in understanding this.

Keep your brain in the game

Trading really is no different from most sports. I just try to mentally stay in the game. I know that my involuntary error decreases as the market, my training and level of experience increases. I transform the emotions or disorders in the study or the best marketing training. I know your game and work hard to eliminate less profitable deals. I know that the concentration of the process would ensure that the results will be achieved automatically. And finally, no matter how many hours a week I am going to work - 40, 70 or 100 hours - I will not be successful if I do not believe in their ability to be successful. Positive thinking, combined with hard work and proven traditions, will always win over the doubt, fear, internal stress and other negative psychological aspects of trading.

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.

Traps for Traders

When we say that ten years working in the market, we first of all say that it is ten years of experience working with people.

The lion's share of the stock market is dedicated to technical analysis, trading systems, mathematical modeling. For those useful things such as the loss of the so-called human factor. While the psychology of investor behavior is largely determined his victories and defeats. By observing the reaction of the players in different situations divided the executive director of the investment company «TSERIH Capital Management» Vladislav Kovalchuk.

«Currency speculator»: You work on the Russian stock market almost since its inception. Sometimes you have accumulated mass of observations of human behavior that relate to the category of «players». Does their behavior, how they operate in the market, some interesting patterns?
Vladislav Kovalchuk: People who work in the stock market, it seems surprising act in different situations. Do not discovered America, when I say that all traders, from novice to veteran actor, admit mistakes, which are often associated with psychology. For example, a newcomer has made some good deals and believed to be a professional. For any other business, such as sales, this is normal. Appears self-confidence in their actions. It may be somewhat overstated, but that in itself is beginning to work on professional development - pave the way to success.

On the stock market a lot harder, a manifestation of such feelings and can become a psychological trap. For example, an investor engaged in intraday trade, get in a few days, a positive result. It begins to seem that he can outflank the market and a couple of days gets a loss. And here begins the most important thing - the player thinks he has done everything correctly, could still beat the market and begins to methodically repeat mistakes and to continue to consider them random.

«AC»: How long can this last peak?
VK: As they say, «the light at the end of the tunnel is», but not the end of the tunnel. Gradually, the player loses the amount won. Then, from the first trap, he gets straight to the second - a strong desire to win back lost, do not analyze their misses, and, accordingly, without changing the tactics work. «In fact, acting in a way, I am in the beginning of a well-earned!» - Thinks the player. As a result of loss increases, and the investor could lose starting capital.

Or, for example, when you close the position the player wants to sell a little bit better than what is currently the market offers. He starts to chase for the price, the price goes against them, reducing the position. Turning to professional slang - in an attempt to catch «pips» trader loses «figures». Consider another situation - a player aims to capture at least a minimal profit, but it is absolutely not willing to close down loss-making position. As a result, it can only exacerbate the loss.

Such examples are many. Most problems are only two motives - the desire by all means was not possible to miss profit and the fear of losing ones. And emotions and too much arrogance leads to mistakes, not only beginners but also experienced players, who then are puzzled as to once again managed to come to the same rake.

«AC»: And what behavior would be correct in this situation?
VK: Stop and think, look at the situation from the outside. Forget about losing and start from scratch. It seems that everything is done very simply. However, as all the excellent know, is difficult to rise above their emotions and objectively analyze the situation.

«AC»: So you need to consult more with other players?
VK: On the market, each busy with his / her work, people earn money, and not always even if you want help from colleagues in the workshop have an opportunity to engage in other people's difficulties. We solve this problem in another way - in our institute, there is personal managers. This means that any trader can always count, including, in consultation with his personal manager, and specialist analytical services company.

For large customers, we have such a service as individual trading advice. In this case, other than a personal manager and analyst, to provide services to the client connects personal trader. He shares his views on the situation and, on request, offers suggestions of conduct on the market.

«AC»: As far as investors are listening to these recommendations?
VK: It depends on whether the person is ready to even think about the meaning of our recommendations. When he calmed down and examined, it has already made a step in the right direction. Of course, this does not mean that he starts to win, but at least it has less chance to get in the trap, which came before him, are and will get thousands of players worldwide. In general, customers in most cases, followed by our recommendations. Thus, an individual trading advice is now very in demand. Unfortunately, our resources in this area for obvious reasons, are limited, and we offer this service only to large investors. However, if we say exactly that to help a person to objectively look at what is happening, adjust their behavior to avoid the obvious mistakes, then communicate with the manager is quite enough. In addition, we regularly hold seminars for both beginners and more experienced players by our Training Center. For beginners it is a good chance to not only learn basic elements, but also listen to the professionals who «go to the light».

«AC»: That is a personal manager in part serves as a psychologist?
VK: Well, that gives the opportunity to sell all the brokers - who is a more interesting, someone less interesting. But access to the market - this is only part of the iceberg ...

Visual work of the trader

Most traders spend much time on the establishment and optimization of new, highly efficient trading systems. However, the real work of the results are not so impressive. Rather, in most cases blame the human factor. The author tries to visually assess the quality of successive transactions by trader using graphics of Japanese candles. The possibility of such an assessment can help the trader to adjust its strategy in the market

Mechanism sapiens
The main activity of traders practicing mechanical approach to work (when they are not in the market, of course), is to create their own trading systems. Typically, these systems include a model of market behavior on the basis of technical analysis, installation of protective orders and some money management rules, more precisely, the rules of the increase (decrease) positions, depending on evolving market trends. Ideally, when the trading system was created, tested, optimized, etc., the trader must operate automatically, performing in the market system served the team. In an automated, but not automatic. The small difference in terminology leads to significant changes in the work: the system is another link - the trader. Made them the human factor can greatly affect the efficiency of trade. This is compounded by the fact that usually when the market does not use a trading system. It is also possible to use multiple configuration of a system. And the choice is usually also a heuristic nature.

How to minimize harm and maximize the benefits emanating from the trader in the work of its systems? As always, you can try to apply a universal way - to use feedback as a result of real work. To do this, provide a simple method of visual interpretation of its results.

Samurai method
As this method of interpretation of the work can be scheduled to invite the Japanese candles. Suppose that a trader has a certain history of transactions on a real instrument. Let us try to interpret each complete transaction (buying and selling) as a standard candle of tehanaliza. The analogue values Open will be the value curve arrived at the beginning of the transaction. The analogue values Close - the real value of the curve at the end of the transaction profits. The analogue value of High will be the value of the profit curve, if the position is closed at the highest (for bovine market) point on the interval of the transaction. A analogue Low - the value of the profit curve, if the position is closed at the lowest (for bovine market) point on the interval of the transaction. In the case of short positions need to change the High and Low. The proposed data representation body candles will demonstrate a real profit from the transaction. Lower the shade - this is a possible drop in profit in the most disadvantaged in the closing of the transaction interval, the upper shadow - the amount of lost profits on the deal before the interval. By placing such a candle in a manner consistent with the actual operations, it is possible to obtain a fairly complete picture of the profitability of the curve, to assess the quality of the trader, the trading system and may further adjust the trade on the real market. After analysis of all individuals in the instruments can be easily evaluated as the applicability of the system and their own mental preferences.

How it looks
Consider as an example of testing one of my trading system on a real trade (Table 1).

Originally intended to test the work of sound, without a stop signal, without the margin, without correction of fundamental analysis. To simplify the results excluding brokerage commissions, overhead expenses and the discount for the term of the transactions. The purpose of operations, it was not making a profit as such, but development of the interaction between the trader and the actual market. It was interesting, because pure system shows the best, both qualitative and quantitative results than with the limitations imposed on it by the foot and the various filters.

Apart from dates, at first glance, everything is fine: the profit curve is going up. Interest earnings on the use of capital is also not bad. Let's see now, as the profit curve is a graphical interpretation (Fig. 1).

There are already the outcome of the case. Transactions 1-5 were quite successful, but I decided to play with time window and attempt to increase profits. The result in the absence of a stop-signal, demonstrating a significant Drawdown bar number 6. Bar shows the number 7 is nothing but sheer stupidly attempt to go against the market, despite the mounting losses, ie averaged.

Interestingly, the trading system has proved quite resistant to the most unprofessional actions of the trader and drew the final profit. Again: the transactions were carried out for debugging trading system and it was assumed that the human factor will not be. But, alas, even in small-money, in the experiment, all turned out differently.

During the experiment, I broke a lot of work in the market. Bar 3 - spasmodic closure of the position without the alarm system, 2 bars - the closure of positions in the movement are not, the bar 6 - to change the parameters of the system directly to the work of child illness averaging mentioned. Really good, you can recognize only the bars 1 and 5. A further development of the proposed method may be operative in the course of bidding, the analysis of transactions and the selection of appropriate strategies for each trader. For me the best are the candles with small upper shadows. However, this topic has already applies to the consideration of characteristics of my trading system and not connected with the proposed methodology.

Good time to trade

Linda Bradford Raška is a professional trader since 1981. She began her career as a stock exchange floor trader, and later organized a company to manage money "LBRGroup". Linda Raška was presented in the book Jack SCHWAGER "The new market wizards" and is well known for her own book "The Virtuosi of Wall Street." She also published a great number of educational articles on the short sale in the markets.

As experienced and novice traders spend a lot of time trying to understand the model on the markets - and displays graphics on a set of time scales, seasonal trends in some time months or years, the mood and data flow of funds. It is clear that there are many different ways to analyze markets. By analyzing the model, the trader is looking for a sufficient reason to conclude a bargain or to withdraw from the existing one. Markets monitored to detect subtle changes in the core ratio of supply and demand, and once observed "initial condition", which indicates a situation where there is a possibility of profit, trading just a matter of clicking on the "trigger" to enter the market, the definition of primary level of risk and then manage trade properly in response to market action. Trader is managed trade, watching the confirmation or non-confirmation of his assumptions. But why the trade will never think of such a light in real life? In the end, this is just a game of numbers and does not require much time to study the basic rules.

Perhaps this is because the trade is usually 10 per cent consists of studying the market and 90 per cent of the study itself.

Unfortunately, if the trader does not know itself, the market - this is a very expensive place to learn. If traders devote half the time they spent on market research, to examine their own behavior, the benefits would be much more than access to any training courses, videos, system or technical book ever written on the markets. The trade balance suffers when those transactions are not concluded, the trade is not respected and carried out "voluntary mistakes." Fortunately, traders can learn to identify those personal behaviors that lead to loss of attention and concentration, in addition to other bad habits.

Voluntary error
Let's look at some of the usual model, leading to voluntary errors. Consider a trader who carefully monitor the market for a particular situation and, for some reason, the conclusion of the transaction skipped. He then enters into a transaction spontaneous, upset that missed the first one. The market makes a good motion, and the expense increases. Trader then proud of profit, which he did, becoming negligent and relaxed, which leads to a prolonged period of recession. He misses the point of exit for fixed gains of the winning transaction and allows the position to become profitable in a loss. Upset, he then averaged in the hope, at least attempt to compensate for the loss.

Often bad behavior is the result of emotional reactions. However, in some cases simply the result of bad habits. The aim is to make trade as automatic as possible, and thus the ultimate goal should be to form a habit of winning. As Socrates said, "We are what we repeatedly do. Excellence, then, is a habit." Here are some tools that can help traders determine the behavioral patterns that prevent them and, further, to eliminate them or at least return to the control. No less important is the ability for traders to identify behavior that is correct, because this is the first step to build confidence.

Identifying problems
Always Identify a specific problem or challenge. Here is a list of questions that will help identify areas that should draw more attention. Is there any time of day when the most losing the deal? Some traders achieve best results the morning and some afternoon. What types of transactions lead to more consistent results? Many traders have shown their best results, trading at a short time scale, and not giving a big picture raise doubts about the benefits of trade in the longer term. For others, attempts to make short-term skalpirovanie may result in an excess of the trade regime and frequent rapid spread. Is there a game plan or program trading, which is defined before the start of the trading day, and how close this plan implemented? Are there any extraneous factors from the outside, such as personal relationships, financial problems, or disease affecting the reasoning trader or distracting him? Is the days of big losses due to emotional or decrease alertness, and whether the trader has a more emotional or reactive to these days? Is the general peregoranie, leading to bad habits, lack of concentration or inertial excess trading regime? These are some of the reasons that normal, intelligent people can be caught in the destructive behavior. So, is it possible to break the patterns that lead to more emotional market downturns? And, as a trader can move it to the next level, knowing when things go right, and thus increasing the size of the best deals?

Body Language
For most people it is very easy to learn to recognize how their body reacts to different conditions. The athlete, who is in his plate 'can acutely feel fully relaxed. On the other hand, an athlete who "broken the rails, will be tense, worried and suetliv. Ability to pay attention to the physical reaction can help a trader to confirm when he is in good behavior, or violating their own rules. It can also learn to recognize that his body feels when the deal succeed and that it feels at least a transaction. Here is a personal example. When I know that the transaction is in line with my plan and the market operates as expected, even if the transaction is not completed yet, I find that I feel a high level of confidence that I did not feel forced to look at the screen. I do not feel anything of concern and relaxed sense of "confidence" that my position is good. However, if I am in the market, and did not feel "right, even if the market moves against me, I have гляжу on the screen, my breath a little more than petty, and I see no migaya. It may take five minutes, but I will still sit in exactly the same position on his chair. I also know of some graphical models, in which I participate when I begin to weary or blow. I know from experience that I will most likely reduce its level of vigilance in these moments and, therefore, I try to stop trading when I feel the same way.

The longer a trader trades on the market, the more he realizes that for the higher maximums can be followed by lower minimums - this is the only thing to always be alert. Many winning sports teams have won championships, building a tremendous defense. However, the ultimate goal of trade is to do more than just survive, and actually earn a random gifts that can offer the market. Therefore, just as important to recognize how you feel, being in a condition which can lead to errors in reasoning, it is equally important to determine the state when you can confidently move forward. This condition, when it's time to enter the market and stay there with a strong trend movement. Confirmation of winning the deal comes not only from the indicators, but also from our own physical condition, which gives the feeling of being in sync with the market. Ultimately, traders who reach this trade will be most successful. As time passes, the experience will be the most important asset trader. Every day, the trader gets more experience on how he feels signing the best deal and which of his own behavior led to trouble. As soon as he will explore the models that lead to mistakes, he will be much easier to make these mistakes less frequently. The less voluntary error, so, ultimately, more sustainable will be the curve of his assets.

Good time to trade
Sometimes the market can be boring times when easy to wonder whether to come back ever again "good times". Keep in mind that the volatile market movements. In any market can be vyalye long periods without any significant movements or periods of erratic volatile movements in both directions. The market rarely moves consistent with moderate fluctuation. Traders who do not even have a strong temperament, will have great emotional fluctuations. Experienced traders know that there is always one or two heavy-hearted period of the year, and these times call for great endurance and patience. If the trader does not have enough experience in this business, he must be alert so as not to force events and do not exceed the trade regime.

It is possible to break the model, which leads to more emotional recession? Is it possible to develop equanimity? These are areas that every trader will need to continuously fight. Even many professional traders make mistakes, after many years of very successful career. It takes only one incident where something is beginning to shrink from them, and they were diverted by external events such as divorce, illness or family problems in the business. External distraction can easily disrupt attention and concentration.

How to deal with personal challenges

Traders, who from time to time have emotional challenges or problems in their trading career by no means alone are. These challenges are part of business. Listen to your body and its signals - it always gives signs of bad habits. But may be some steps that will help protect you against each trader's own "Achilles five. Just look at the specific problem or challenge. For example, a trader may have the tendency to give a three-week return for the two days. Sometimes it is useful to identify the conditions that the previous period, when a trader becomes a "vulnerable". Does he feel himself likuyuschim, reaching new highs on your account? Or whether it was diverted events that took place outside the trade? Trader should learn to recognize the various sides of their personality that affect their trade, because these features will never go away. In the end, we are not robots - we are real people. But when we can recognize the patterns of feelings and emotions that we feel, before they started to bring trouble, we are less likely to make a deal, which is not part of our game plan. Keep trading plan every day. He is insured from entering into spontaneous transactions. It also protects the trader from the use of inappropriate strategies for the day, reminding him that the market is changing from period to period of development trend of variability. Trader can identify in advance the type of the period in which it is located, and be prepared to apply the appropriate strategy for the day. Traditions and rituals are the tools in order to remain prepared in the present and can help protect the trader's conduct consistent with his trading plan. Everyone needs tools to create structure and order in the otherwise very abstract game. Maintains records, such as the logical background of transactions, statistics or market indicator, is an excellent means of discipline, which helps to remain consistent. Also effective tool is a set of small goals every day. Such a goal might be to have a winning three consecutive days, or a clear plan to follow the trade during the day. This also may be - do not enter more than three transactions per day and to refrain from exceeding the trade regime. Or, open position in each five-bull or bear flag that formed. The small trader's goal should reflect his own style of trading, the needs and weaknesses.

Trader should learn to distinguish between errors caused by the market environment and the voluntary mistakes that he makes himself. He should avoid doing on the efforts, if the current market environment is unfavorable, or his normal style of trading is not suitable for current conditions. A good way to correct behavior is to always think about the desired result. Write it next to the trading screen. Read it every morning.

Each time a trader is going to take any action, it must ask itself whether it has its desired goal. It should provide a sense of victorious after a short-term goals and overplay this feeling many times in their minds as motivation. It is very clear to imagine that the goal is related to the market every day, not only in the long run. Traders should consider the possibility of a friend, a trader with whom they can share their daily results. Most traders will make a greater success if they would be responsible to anyone for the performance of their trade. They are less likely to allow a big loss to get out of control. If their reasoning harm, at least, there is someone else who can draw their attention to the fact that a trader deviates from its plan or may be in need of a break. Dude on the trade - this is not the one who offers advice on the market or in relation to specific transactions. If the trader feels the need to ask anyone's opinion on the council or the market, it is sure sign that he should not be at this point in the market. Dude should be the same coach who can lift the mood, or enhance, if necessary, motivation, or to serve a foreign party to indicate when a trader is in the destructive behavior of the commercial, which ends with a long recession. Markets can change quickly enough. Less biased trader can be more easily adjusted to the environment. If he starts to develop a bias that is not accompanied by technical factors, but due to emotions or weakness of the discourse, the signals of his body most likely did not tell him. Most professionals know when they are in a bad deal and they know when they make a mistake. The more the trader makes transactions, and the more experience he gets, the sooner he will learn to recognize their own personal traits, which indicate that he really is in a bad deal, irrespective of whether their level of stop-order or not. As long as the trader is able to benefit from this knowledge, this is another excellent reason to always have placed a stop order on the market! It is equally important that he remembered how his body feels when it is under control and has a winning attitude. The best traders go a step further and added to a winning position. The green light is lit! The foot on the gas! This concept is as important as learning to recognize when a transaction is not working.

What lesson should be learned
Trader, which passes through a losing period must ask ourselves, "What lesson should I explore?" "What should I do to change this situation?" He should never do yourself a disservice, as we look back at the graphics model with regret and saying "I had to see it." The problem is not that he sees or does not see. The problem always is how the trader managed transaction after it entered the market. Managing trade - is a process of determining the level of initial risk and then stop-movement orders from this initial level as the market movement or placement of orders on the way out of position, whether at a profit or loss.

Trader must rely on their best arguments at a time when a deal and manage it. From experience, he can learn to recognize behavioral patterns that he felt when his judgments can not be 100 percent true - the days when he was inclined to reduce their vigilance and the market can punish him. And then, after some time, the curve of the assets of the trader begins to improve steadily as it will do less and less voluntary mistakes!

Gaps: friend or enemy of the trader?

All the traders used to see on the graphs of market gaps between the price the previous day's closing price and the current opening. Call these breaks gepami. Causes analysts interpreted in different ways, primarily based on fundamental analysis. Even more vague possibility of filtering gepov, not to mention their rational use.

Literary floor in tehanalize
Gap - this is the English literary word (not an abbreviation, as many mistakenly believe), which can be translated into Russian as «gap». In economic terminology, this term is used very broadly, and refers to the difference between any of the values. Thus, gepom called the excess of assets over liabilities. The greater the percentage gap, the higher the potential risks of interest. There is even a risk-management industry, which is called the «gap-analysis».

The technical analysis of the word «gap» is quite unambiguous in nature - it is visible on the graph bars or Japanese candles, based on prices of opening and closing the gap between the current candle or bar and the previous candle, or bar. On the other graphs, such as a linear graph or graph tic-tac-toe, gepy not be able to see.

Figure 1 are gepy in the afternoon schedule of shares of RAO UES. As can be seen, they occur more frequently. On the stock market gepy - is not uncommon, though, such as round-the-clock on the FOREX market, they occur much less frequently (Fig. 2). If the action does gap up or down, it's quite a significant signal that can be used by the trader to make a decision. Some analysts believe the market shares gepy signs of accumulation or distribution.

On the stock market gepy - is not uncommon, though, such as round-the-clock on the FOREX market, they happen much rezheNa stock market, there are two options gepov: arose as a result of reported revenue growth of the issuer and the artificially induced brokers. In the first case, the value of the gap indicates the potential power of the trend, which is directed towards the gap. The immediate cause of such gepov rooted in high expectations of analysts. Naturally, working in the market of large institutional investors are beginning infusion of money in the stock issuer, show more profitability. In fact gepy suitable for fashionable now trade on the news as a confirming factor in technical analysis. The task of the trader in this case - to catch a gap in the time gap since it is an opportunity to continue the rollback.

This, of course, is the gepah up. Gepy down, respectively, are due to the reported decrease in income issuer. It should be noted that gepy down - more rare than the top. They speak of any «great shock», occurring at the issuing company.

As a consequence, we can expect the continuation of the fall of the company's shares. So investors should sell their shares as soon as he saw the gap down. It should be noted that not all gepy developed under the influence of news, the authenticity of which is proved. Often, these news stories may be mere rumor, which, in particular, now accrete «YUKOS case».

Pro and contra
There are a number of strategies which say the contrary: the gap is not continued, and izlet trend, and already the more it is a new trend. For example, if the gap was formed up, should get up in the short position and wait for the completion of the trend. This is called gepom izleta, it forms a new maximum price. Similar gepy can be found in the charts of financial instruments (Fig. 3).


But how to find this pattern? It is this strategy correct?
The issue is a discussion. The point is that the gap izleta may arise precisely because of the increased flow of investment into the company. In this case, technical analysis is powerless to fundamental factors, and clear all the failure of this strategy. It should be noted that, according to many analysts, «threshold impotence» technical analysis are, for a variety of sources, the infusion of 5% to 10% of the total capitalization of the company. But how do you solve this dilemma, with the only technical analysis? It is obvious that the direction toward the dominant trend observed at the opening day of the gap - the gap is continuing. In this case, it is advisable to open in the direction of gepa. However, it also cuts both ways - if the gap is too big (criteria value, the truth is rather vague), may be followed by rollback.

But the gap can be strong and stop the trend when the market goes self-doubt, investors that are long ranged with the decision, and, finally, seeing the force of the trend and opened positions. Such gepy typically marks the beginning of retrogression, or even a change of trend. Open positions against the trend in this case it is necessary, exposed pre-loved stop-loss just outside the peak. You can also use gepy izleta trend to fixation of existing profits.

Types gepov
Most often we deal with gepami on daytime schedules, raised at the opening of the market. At all-day market FOREX such gepy sometimes occur after the weekend. Analysts have developed a set of rules for this type of gepov. Thus, it is believed that gepy the opening of 60% of cases may be during the day partially or even completely filled. Similarly, external bychi gepy opening (outside of any level of resistance or support) up to a new maximum of 60% of cases. Up to 70% of the likelihood of achieving the new minimum in the case of Bear external gepa.

If the gap is not filled within the first 15-30 minutes after the opening of the market, this is a strong signal that the market will move in the direction gepa opening. There are several types gepov:

- Complete breakdown of top (opening price of the day above the previous peak);
- Complete the gap down (opening price of the day below the previous minimum);
- Partial break-up (opening price of the day above the closing price the previous day, but below its peak);
- Partial break-down (opening price the day following the closing price the previous day, but above its minimum).

There gepy breakthrough. They are fundamentally different in that there are important breakthrough in the levels of resistance or support. Price falls sharply from the previous trading range, which is reflected in the chart bars in a gap between the current and the previous bars. If such a gap is formed at the end of a technical analysis of the figures, it can serve as a strong sign of confirmation of this figure.

Further movement can occur naturally in the breakthrough, which can be very dynamic. Usually gepy breakthrough is accompanied by increased trading volume and volatility. The bigger the gap, the less likely it is closed and the return of the price back.

Trade at rupture
When you trade through gepov should pay particular attention to market volatility. You need to install a range of deviations of the price a financial instrument, which saw the gap. We recommend that you put a floating stop-loss, the amount of which depends on market volatility.

The strategies of trade on rupture often was far from scientific methods resembling guesses. But others are mathematically precise trading strategy, which are based on formulas in MetaStock.

The strategy to develop trading systems, looking gepy, simple: in a primitive form of general enough to calculate the gaps between the opening price of the day and the previous extremum. For example, both built below the trading system, which is part of the market towards full gepa:

Enter Long:
L> Ref (H, -1) OR Cum (1) = LastValue (Cum (1))
Enter Short:
H

The results of testing this trading system for shares of RAO UES of Russia are as follows: the average profit margin - 99 points in the month, 8 to 14 profitable transactions unprofitable.

Figure 4 shows the schedule for return of the trading system. The second trading system differs from the previous one that also takes into account the partial gepy, allowing for the possibility of using opt1 regulate the amount of gepa.

Enter Long:
N1: = opt1; L> Ref (HHV (H, N1), -1)
OR Cum (1) = LastValue (Cum (1))
Enter Short:
N1: = opt1; H
OR Cum (1) = LastValue (Cum (1))

When opt1 = 4 the system shows the result of 204 points in a month, 3 winning deals against one loss (Fig. 5).

As we have seen, described the system outputs are not. Next the system is equipped with an exit, is also on the difference in prices of opening and closing of neighboring days:

Enter Long:
N1: = opt1; L> Ref (HHV (H, N1), -1)
OR Cum (1) = LastValue (Cum (1))
Exit Long:
N2: = opt2; C
Cum (1) = LastValue (Cum (1))
Enter Short:
N1: = opt1; H
Cum (1) = LastValue (Cum (1))
Exit Short:
N2: = opt2; C> Ref (HHV (H, N2), -1)
OR Cum (1) = LastValue (Cum (1))

This system provides 6 to 5 of profitable transactions unprofitable. The result - 201 item per month (Fig. 6) - about the same as the second system.


Needless to get involved is not worth
From all the above we can conclude that to develop a strategy based on gepov - case ungrateful. No clear criteria for «truth» gepa, and it is unlikely that they will be worked out by technical analysts. Trading systems based on gepov can be used, but the MTS with other technical indicators give better results. Moreover, the developers, testing trading systems in the stock market, is a question as to filter out gepy. This universal tool has not yet been found. It is indisputable that in different markets, the frequency of occurrence gepov quite different. Thus, in the Russian market chaotic nature of speculation in illiquid stocks, of course, creates gepy, both public and intradey. On the NASDAQ gepov much less than the NYSE, while in FOREX at all unusual museum, which, if happens, it serves as food for a long reflection on the fundamental causes of the analysts of this phenomenon and its possible consequences. So what is the gap Technical Analyst - friend or foe? In obschemto any technical factor can be a benefit. Also gepy can be used, for example, as a powerful means of identifying izleta market at the close of the existing position or to accept a certain level of a breakthrough when trading on the break. But overly enamored gepovymi strategies do not.

Six of Forex

Few traders stop to consider the context that determines the Forex market, although it would be all. Since the Forex market is increasingly playing the role of retail investment environment, you need as much detail as possible to explore all the nuances of the environment and the rules that will survive and successfully operate in the investment environment.

Analysis

• Who: to know the Forex market actors that shape the markets;
• Why: to understand the nature of forex market and its attendant opportunities;
• Where: Find the best dealer, is suited to your goals;
• What: choose a shopping tool, based on your preferences;
• When: To determine the time when the transaction would be most effective;
• How to: pick up a set of analytical tools that really improve your trading.

Action

• Draw up a personal trading plan;
• Find solutions that will help you execute your trading plan, step by step.

Analysis

For most traders, a comprehensive trading plan is a false ideal. In particular, in the FOREX market the illusion of easy money often distracts the trader from the reality, which is a difficult and painstaking work. But how can attest to anyone who has achieved success in trade, commerce - so, above all, discipline. Trading requires a plan based on extensive market knowledge and ability to carefully and consistently apply this knowledge. The main component of any trading plan - an understanding of context, which defines the surrounding market environment.

Six of the market Forex
Movement of prices in the FOREX market to resemble traffic shoal of fish. At one point - an absolute harmony, the next - a complete chaos. As an observer of these jambs of fish, you believe that you can accurately predict the direction in which it cannot go every time? Are you ready to bet on this?

What makes the fish go that way rather than another? Why do they operate together in an instant, moving with force and precision, and move in such a way that seems to be an infinite number of directions? There is no way to know if you can not feel that sense of fish every time they move. Pisces have an instinct as to the nature of their environment. They are born to understand the context of all the things around them, and can react accordingly. Of course, if you have such an understanding, you would have been far more accurate predictor of the movement of fish! Trading on the Forex market in this sense is not very different - we must develop a sharp sense of what is happening around us. Can we ever accurately predict every move in the FOREX market? Of course not. But we can use our understanding of the context of the market - the six forces of forex - to make better, more cost-effective choice of deals. Once we understand these forces, we can build and work within the framework of a comprehensive trading plan:

• Who sells at Forex? You must know who is participating in this market, why are they successful and how you can emulate them.
• Why trade Forex? It is possible to obtain excellent income trading at Forex, but not for all participants. You are one of them?
• Where you need to sell? Select service providers that can provide you with the opportunity to effectively sell your style.
• What you need to sell? Select a currency pair, methods of entry, exit and management of money, which maximize your income.
• When you need to sell? Deal, when the market environment is most likely to provide the best conditions in order to sell on your system.
• How should you trade? Deal, using the methods that have proven their ability to provide maximum efficiency.

Knowledge of these forces and how they work, is the main component of your success as a trader. Figure 1 shows these 6 forces, their relative rarity, and their impact on profitability.


The lower you are moving to this scheme, the less you will find traders who understand an element of the overall context and the more revenue you can achieve with the trade.

Who
Far more important than knowing who trades in Forex, know who trades in Forex successfully and how they do it. Players in the Forex market work with widely varying horizons. When one of these players are in the market, the impact is proportional to force the trade initiator. This effect may play a role in the short term, a radical change in prices, and could play a long-term role in determining trends. Figure 2 shows the main participants in the market Forex.


Each group of participants has a different attitude, goal, investment horizon and market impact. A key difference among these market participants is their level of sophistication, which is determined by the following elements:
• Managing money
• Aims to Profit
• Level of automation
• Quantitative ability
• The ability to study
• Level of Discipline

Of course, there are sophisticated and inexperienced banks, governments, corporations, investment funds and traders. But among these segments, the individual trader has the lowest level of external control. Taking into account that the government, banks, corporations and investment funds follow the instructions and limitations (to some extent), traders are only limited by the level of their capital.

In the absence of external constraints, traders are divided into two groups: those who can impose internal constraints, ie discipline to their trading strategy, and those who can not. Those who can impose this discipline, we call the experienced trader. In a zero-sum game of trading in the FOREX market, the trader uses the hard tools and strategies that mimic instruments have a very sophisticated institutional participants to extract profits from the party, a newbie. Only hard-trader is able to achieve positive results in the FOREX market.

Why
The volume of trades in the FOREX market in recent years has increased, as more and more individual traders to earn a living, selling it, and the popularity of riskier investment vehicles like hedge funds, has increased. The main incentive for these investors is the higher yield, but on the foreign exchange market, four major factors create a unique investment environment:

o Liquidity
o Leverage
o Convenience
o Cost

In any other market you can not find the conditions that are favorable to the investor, at least at first glance. However, using their advantage of these favorable factors, you should always keep in mind on their back side.

Liquidity
The liquidity of the market have a high degree of transparency, even when large transactions occur. Worldly-wise trader understands that it means: the Forex market involves very large players. Because traders are growing in their sophistication, they understand that these big players have a significant impact on the price, and monitor their entry into the market.

Leverage
The low margin requirements in the FOREX market allows to obtain the correct analysis of huge profits. However, in the case of an incorrect analysis, the multiplier effect of leverage also increases the loss.


The worst scenario - a series of consecutive losses. Knowing how many consecutive losses your system can afford is a key factor for the preservation of capital. (left - the number of consecutive losses, the top - the lever, right - the remaining percentage of capital)

Accessibility
The fact that you need to go to sleep or spend time with his family, does not stop the functioning of the market Forex. In other markets you can trade during certain hours, usually from 6 to 10 hours, which are clearly defined. On the other hand, trade on the forex market requires a 24-hour monitoring. This can be achieved through the automated trading system or, less optimally, through a defined stop-order and limitordera or physical control of the transaction.

Price
"No fees" - a marketing slogan, many dealers, that is perceived as a significant profit. But the fact that there are no commissions, does not alter the high transaction costs, spreads paid to dealers through the purchase / sale. There is no doubt that liquidity, leverage, comfort and operating costs available in the FOREX market are excellent tools for investors, but not always. As easily as these tools can be used to create capital, they may be using the wrong lead to the destruction of capital. Beginner traders destroy capital, and its sophisticated pose.

Where
One thing is to choose a dealer, and quite another - to choose the right dealer. Offers service dealers can take many forms, and each dealer usually has one or two major features that they bring to the fore. In the analysis of the dealers, you understand and appreciate all of their proposals for the service, and then apply it to your style of trading that pick for themselves the best dealer.


Understanding the basic components of the trade plan was crucial for successful trade. All these factors work together. Trade currency pair with a wide spread, using a short-term signals the entrance and a great arm, probably will not be the most successful strategy. On the contrary, trading foreign currency pair with a narrow spread, using medium-and long-term signals to the entrance with a small lever, has a greater chance of success.

In the final analysis, currency pair, the signals and the approaches to the management of money should be combined, and without controversy. Beginner traders make critical mistakes, trying to hide together strategies from different sources, instead of systematically constructing, testing and building a comprehensive plan of trade. Hard-trader, which makes this a difficult job, working with the trade, which creates opportunities for consistent profits.

When
Forex market operates 24 hours a day, but whether the market activity of the same all the time? Of course not, but many traders do not take into account this fact in their work. By studying historical price data, you can compile the following tables of market activity.


It is better to sell at the most opportune time. The table presents the average trading ranges for the four major currency pairs. One of the best ways to confirm the technical indicator - this amount. When strong, the indicators tend to be more accurate. Unfortunately, no data on the amount available for the Forex market. Use of trade ranges - following an effective tool. With these data at hand, traders can more carefully evaluate when to trade. Not only the technical indicators will generally be more accurate at different moments of the day, but there is a potential for greater profits, and the potential for lower losses at other times of the day. Consider trade on the EURUSD at 10.00 EST against trade 22:00 EST. In the first case, the average trading range is 30 points in the second - 10 points. Entrance to the market during morning trading creates some interesting opportunities - the market can go with you or against you, but you should be ready to move in any case. On the other hand, if the market goes against you by 10 points in 22:00, as far as you concern? Probably not as good as if it was 04.00.

Anyone can trade based on technical indicators. Beginner trader, in particular, ignores the importance of "when" to trade. Worldly-wise trader uses timing to their advantage, creating opportunities for profits and limit losses.


As
Once an understanding of the external trade is over, the hard work begins: the trader must understand their own consciousness. External items are easy - they are usually rational, evidence-based, consistent and streamlined. However, the trader's mind away from all this. Trader goes through a huge number of emotions and thoughts during the trading. Some of them have a negative impact, some positive, but very rarely see a trader, who would be consistently followed his trading plan.

Emotions, or lack of discipline are the biggest enemy of every trader. This is so true, that could be argued that the discipline is a more valuable asset than the very commercial capital, because capital can be supported only with discipline. We can not say that a trader can bring some value - it does. In moments of clear, objective examination, many traders, even novices can build excellent trading system. These systems can benefit their understanding of the market Forex. However, once live, the system suddenly dilapidate.

Why?
The simple reason is that emotions should not be present in the trade. Emotions compel the trader to act differently after big wins or losses. Emotions compel the trader to act is absurd when there are large movements. Emotions compel a trader to apply his trading system inconsistently. If you've done a review of successful traders, you would find many similarities. Traders understand and apply all the forces of the market Forex. They are usually traded in an incredibly simple trading systems. They use a conservative, well-thought-out philosophy of managing money, and they trade with absolute consistency. For the institutional investor, absolute consistency is not a problem because they have more staff and more resources at their disposal. For individual traders, there are three groups. Those who trades with consistency, those who traded with the manual sequence and those trading with an automated sequence. Beginners, of course, are traders who benefit from the transaction to the transaction. An individual trader who uses a consistent discipline or automation as the basis for its trading activities, maximizing their level of sophistication.

Action
Worldly-wise trader understands market forces six Forex. He works with the understanding the market environment, and this understanding lies in its commercial run. To succeed in trading on the FOREX market, you must become a skilled trader.