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Useful information for novice traders in the US stock market. Reviews, articles and videos about the leading American stock exchanges

We trade like professionals: risk management

What is the difference between rash gambling and professional trading?? For most, the correct answer is: in risk management. Many traders believe, that proper risk management is critical to long-term success. Here, what professional traders told me, answering the question about risk management. Mark: “You may not have the best trading strategy., but, if you have good money management rules, you can make money. If you have poor money management, never mind, how good is your strategy. Eventually, you will lose money ". Chris: “You must have a margin of safety for your survival., work this way, that even, if you were throwing the dice, choosing random stocks to buy, you could survive in the market ". Money management is considered very important, but how to properly manage risks? Some traders use very specific rules to manage risk, such as the risk of a small percentage of capital on each trade. Other traders don't have specific rules, however, they often analyze their past moves and decisions.

Trading & Gambling. What's the difference??

I grew up in a small town near Las Vegas.. One summer, a group of teach lei decided to work part-time in a casino while on vacation. Fun for fun, они объединили свои деньги, To view, what's going to happen, if they constantly play on a machine with one lot to the jackpot. They lost about a quarter of their money.. This story shows that, what we all know so. Non-professional players will never be able to leave the casino, even with a zero balance. Free alcoholic drinks, entertainment, lounges are the only goal for non-professionals, who come to the casino to relax and lose money. The casinos are arranged like this, that the probability is always in their favor. Everything, what they need to do is wait, let people play and stuff their safes with cash. Playing casinos can be fun, if you know, how to limit your losses, and when to finish the game. If you don't manage risks, trade without a reliable trading plan and trading strategy, trading is an activity similar to playing in a casino for the sake of relaxation.

What is the difference between a statistical drawdown and a psychological one??

Have you ever had a time getting into a situation?, when losing trades follow one another? You suddenly start to panic., and think, that it never ends? But how strong is this drawdown? Maybe, you just panic for no reason? Maybe, you turn statistical drawdown, which can always happen, into the psychological, what not to do? Statistical drawdowns need to be predicted. If you are using a reliable trading system, then the law of large numbers is on your side. From the point of view of statistics, there is nothing to worry about in a series of losing trades.. Since a large number of trades gives you a statistical probability of making a total profit. It's okay, to get a series of losses. It's just a matter of probability. If you don't take it personally, and just keep on lying to the system (managing risks), sooner or later everything will change, and the system will return to profitability. However, some traders turn statistical drawdowns into psychological ones.. They indulge in despair and pessimism., start thinking about failure. And thoughts have the ability to materialize. Reality can change, if you think, that ended up in a financial hole. Psychological drawdown is able to make you think, that you are stumped.

Emotion and trade

Are you overwhelmed by emotions?? Or, vice versa, almost nothing can make you mad? Some people are more likely to experience unattractive emotions, than others. It's part of our character. When you try to control your emotions during a trading session, very useful to know, how resistant you are to unpleasant emotional influences. Personal character traits develop over time and are relatively stable in different situations.. People differ in the degree of their predisposition to bear unpleasant emotions., such as sadness, fear, anger in different situations. Are you giving in to emotions too much?? Take a little test, Evaluating, each of the yes or no statements, applied to myself.

Wall Street's most influential people

Internet publishing SmartMoney.com published its ranking of the most influential people in the United States in various fields of activity (Government, Finance, Medicine, Industry, The property). Us, of course, interested in the section Finance, which we'll talk about. Below is a list of the most influential people on and around Wall Street.. Of people, determining the life of exchanges and investors' income. We should at least in general outline, what they are, what issues they are concerned about and what they propose to change. Lloyd Blankfein (Lloyd Blankfein), CEO, Goldman Sachs Goldman Sachs – one of those finance companies, that survived the Wall Street crisis and became stronger because of it. 55-year old former tax lawyer Blankfein was the first of all investment company heads to return the money taken from the government during the crisis ($10 billion). This allowed Goldman Sachs to get rid of excess state control., including for salaries and bonuses of employees. At all, Blankfein's main task now was not to make a profit (the company does it very well), and fighting off state attacks on the independence of financial corporations. About that, how the Goldmanite Sect works, I wrote once.

Motivation to trade

Do you like the trading process?? Will you trade in that case?, if trade will provide you with only a living wage? Most successful traders will answer yes to this question.. Do you want to increase your motivation to trade?? You can take several steps in this direction.. First, always go your own way. Many people see life as a competitive struggle.. Although, maybe, it will give you pleasure to defeat their friend and feel superior, but you can never be the best. Often, your affairs will be worse, than others, and it will make you feel bad. Against, if you just believe, that you will succeed and just work on yourself, you will learn to think positively, and you will feel highly motivated to trade even after a series of failures.

In search of individualism

Greed and fear move the market. The masses of bidders follow each other to their fate.. That's a fact.. If it wasn't true, successful traders could not earn colossal profits, using herd instincts. If you are a trader, you have to make a fundamental decision for yourself: will you follow the crowd or go your own way? Walking against crowds is not easy. Every person has a property but a desire to adapt, to follow the crowd. Following a crowd usually gives us a sense of security., like fish, who float in schools to protect each other. For old people, their age gives a sense of security..

How to control the situation in the market?

The need for control is the most important psychological aspect of profitable trading. Traders try to control the market, but, eventually, pony mayut, that they must accept their fate and establish control not over the market, but over emotions. When your money is at stake, it's hard to stay calm, diet and complete control of yourself. Do you want to win, so you have a strong desire, so that the price goes according to your predictions, however, you can almost never be sure of the outcome of a deal. A person has a desire to completely control his own destiny., however this is not possible. Instead, the trader must come to terms with the, that the market will go there, where will he go, and try to control your impulses and emotions, instead of, to play impulsively against the market with feelings of anger and frustration.

How to become more ambitious

Successful traders have a strong motivation to achieve their goals.. Coaches and experienced traders have long noticed, that the best results in trading are achieved by those, who relatively early in their lives set a goal to succeed. These are the people, who have the perseverance to achieve the goal. It’s not easy to get them to give up their ideas.. They operate on the verge of the possible., experience is accumulated, until the chickpeas have reached the highest level of skill. In this process, they develop stone confidence.. They do it all, so quickly and independently, насколько это возможно. If your goal is to find financial success, then it is in your best interest to show zeal to achieve the goal.

Risk predisposition

What kind of job would you like more: and, on which they pay a stable small salary or that, not to which the salary is high, but unstable? The answer to this question will allow you to determine your preferences and risk tolerance.. Most practicing short-term traders would like to give up security and stability in favor of higher wages.. Compared to conventional professions, short-term trading is very risky.. In this way, if you don't learn to tolerate risk, you will feel too much excitement and anxiety when trading.

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